Citywire 1000: Women dominate top-rated in Russian equities

Russian Equities

Continuing with our analysis of Citywire’s 1000, this week we look at individual country funds investing in Russia.

As the largest country in the world, Russia is blessed with massive energy resources possessing world’s largest reserves of natural gas, 12% of the world’s oil and 11% of the world’s coal deposits. This is visible by the 50% allocation to the energy sector in the Russian index, however the managers we analyse below are underweight the sector with around 40% investment in the energy sector.

In Russia 29 managers were eligible for Citywire 1000 and only a total of 7 managers (24%) have made the cut for the top 1000. Russian equity market is the only one where women managers dominate the top three positions. Here we take a closer look at them.

Olga Karakozova

Funds: Danske Invest Russia Kasvu & Danske Invest Russia

Topping the list of Russian equity managers is Danske Capital’s Olga Karakozova. Karakozova runs a total of €201 million in assets, managing the Danske Invest Russia Kasvu and Danske Invest Russia funds. With a defensive growth investment strategy and focus on small and mid-caps, she generated a return of 55% over three years beating the RTS benchmark index which returned 42.3%. The fund invests not only in well established companies but also new IPOs of either Russian companies or companies listed or operating in Russia. Energy at 43.2% and Financials at 13.5% are the top two sectors by allocation with Lukoil, Gazprom and Sberbank of Russia being the top three holdings of the portfolio.

Kristiina Vares-Wartiovaara

Fund: Danske Invest Arvo Venaja Kasvu

Second in line amongst the Russian equity managers is another Danske Capital fund manager, Kristiina Vares-Wartiovaara, returning 62.2% over three years. She manages the Danske Invest Arvo Venaja Kasvu fund, which has drawdown and standard deviation greater than the RTS index at -32.95% and 26.74% respectively. She follows a value investment strategy by investing in Russian companies or companies listed/operating in Russia that are currently undervalued and have low price to book ratio. Around 68% of the fund’s assets are invested in its top three sectors – Energy at 40%, Materials 15.5% and Finance 13%.

Elena Lovén

Funds: Swedbank Robur Rysslandsfond; Swedbank Russian Equity; & Swedbank Robur International Russian Equity Sub

Elena Lovén, fund manager at Swedbank, returned 47.7% with a lower drawdown and standard deviation than the RTS index in managing the Swedbank Robur Rysslandsfon, Swedbank Russian Equity fund and Swedbank Robur International Russian Equity sub fund.

With €952.3 million of assets under management, she looks to identify companies with strongest profit growth and attractive valuations. The Swedbank Russian Equity fund is invested in Energy 43%, Raw Materials 17.5%, Finance 10% and others 29.6%. The top three stocks in the fund’s portfolio are Sberbank of Russia, Lukoil and Mobile Telesystems accounting for 20% of the total holdings.

To find out more about Citywire 1000 and to order a copy visit www.citywire1000.com.

Performance analysis for the Brazilian equity sector has been calculated in Brazilian Real and Russian equity sector has been calculated in Russian Ruble over three years to 30 June 2012.