Renaissance Russian Equity Allocation Fund - 2 Years of Success
OREANDA-NEWS. Renaissance Asset Managers (RAM), the leading emerging and frontier markets investment house, is celebrating the second anniversary of its Renaissance Russian Equity Allocation Fund, which has delivered top-quartile performance since its inception.
In our view, and contrary to many investor opinions, Russia currently offers more opportunities than ever. The Russian market trades at near historic valuation discounts to global indices, despite stable oil prices. Moreover, the variety of sectors and businesses open for investment has increased substantially over the past few years -for example, there are now multiple listed and globally competitive technology companies today, whereas there were practically none five years ago.
Renaissance Asset Managers' portfolio manager Jesse Sherman said: “Russia suffers from a slow-change and poor corporate governance stigma that weighs on its stocks - sometimes regardless of their fundamentals. This doesn't make sense, given the expanding universe of entrepreneur-led businesses that know how to grow regardless of the political and regulatory environment and deliver consistent returns.”
Like other emerging markets, investing in Russia is a difficult task that needs the knowledge and experience of a specialised portfolio manager. At RAM, we focus on Russian companies that are less dependent on state control or influence, favouring those that have a track record of delivering growth and cash flow regardless of the economic conditions. A key ingredient typically for these companies is maintaining strict investment controls, which tends to lead to healthy returns and dividends for minority investors. Russian companies now offer some of the highest dividend yields globally, despite lower pay-out ratios - offering the potential for improvement. This is especially attractive in the protracted low-yield environment that we live in.
The country's central bank is also committed to price stability, improving the visibility of any investment. Russia, unlike other developed and emerging markets, has not embarked on a rate-cutting spree or implemented quantitative easing measures, offering the monetary authority the possibility to act if economic stimulus is needed. This is no longer the case in many other emerging markets, which have already exhausted their fiscal and monetary tools to kick-start their economies. In Russia, instead, there is plenty of room to ignite growth.
At RAM, we remain committed to Russia and we are more excited than ever about the opportunities it offers.
RAM: Adrian Harris, Head of Distribution & Investor Relations: +44 (0)20 3697 4072 or +44 (778) 140-1111
Brunswick: Will Anderson, Simone Selzer, Mazar Masud +44 207 404 5959
About Renaissance Asset Managers:
Founded in 2003, Renaissance Asset Managers (RAM) is a leading emerging markets investment firm. After a decade at the forefront of investing in Russia, Emerging Europe, Africa and Frontier Markets, RAM is now an internationally respected and award-winning asset management business, offering clients access to a range of investment solutions across asset classes, including 12 UCITS funds with over USD 700 million of client assets under management.