Four TKB BNP’s Russian equity funds top performers this year
In the first seven months of the year four of TKB BNP Paribas Investment Partners’ Russian equity funds have shown the best returns among all equity funds on the Russian market without a sector focus.
The top performer overall was the Promising Investments fund, which made 13.9% over seven months, according to data from Investfunds, Russia’s information portal on mutual funds. Over the same time period the MICEX index did not increase.
Three other funds made it into the top 10 – the Premium Equity Russia fund made 11.12%, the Equity Russia fund made 5.44% and the Equity Russia 2 returned 5.34%.
Igor Danilenko, senior portfolio manager at TKB BNP Paribas Investment Partners, said: “Our approach is to invest in the best companies based on two criteria. Firstly, we must be sure that the company can create added value for its minority shareholders. Secondly, the price of its stocks must be significantly lower than our fair estimate.
“We use both fundamental and tactical ideas in stock selection. For example, we are invested in TNK-BP and Surgutneftegas, both preferred stocks with dividend yields above 8%, but we also like the local stocks of Sistema. We expect its discount to shrink as it carries out its buyout programme.”
The investment horizon for the equity funds is at least one year, so Danilenko admits short-term performance can sometimes lag behind the index. One year performance for the four funds is negative, ranging from -1.1% to -12.7%, but all of them are making double figure returns over three years. Here, the Promising Investments fund is again ahead of the rest, making 90.2%.