Russian managers lose out to inflation

Only two of the 36 Russian asset managers that have posted their half-year results have managed to outperform the half-year inflation figure of 4.5%, even though performance in the second quarter this year was better than in the same period last year.

The two top performers were Bazis Invest and Leader, with annual figures of 10.51% and 9.49% respectively.

Seven portfolios across five asset management companies posted negative results, with the highest losses reported by Finam Management (-8.23%).

Government-owned Vnesheconombank, which is in charge of a large proportion of pension assets, has also lost out to inflation. Its conservative portfolio has returned 7.71% over the past year, while its enhanced portfolio has shown annual results of 8.31%.

Higher returns were reported by 20 of the firms under review. Another 15 asset managers are yet to post their half-year results.

The managers showing higher returns explain it with a more conservative approach, which saw a drop in the equity holdings of their portfolios.

Some have also managed to benefit from the market boom in Q1, when the MICEX rose by 8.3%; Q2 saw a subsequent fall by 9%.

The Russian market remains a challenging playing field for asset managers, not least because of the high interest rates at local banks. Even state banks offer 9%-10% interest on deposits, and still higher yields can be gained from deposits in independent banks, so Russian investors have little incentive to invest in more volatile and less profitable products. 

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