The reduction in the attractiveness of deposits and the weakening of the ruble forcing the former depositors of banks to look for tools that can give good income. For three months of 2018, the market volume of mutual Funds rose 20% over the 2017 — almost 70.
The first quarter of 2018 scored a new record for raising funds in mutual funds from the public. According to Investfunds, in January–March to its mutual Funds have invested almost 37 billion virtually any. There are other achievements. In the first three months of 2018, the MICEX index grew by 8%, while the yield on 10-year OFZs decreased to 7.05%. Gradual reduction rate of the Central Bank of RF increased the share of non-residents in Russian debt securities to almost 40%, which also helped the ruble to confidently hold positions at the level of 55-57 virtually any per dollar.
Analysts say that every year the Russian financial market is becoming more Mature financial literacy of investors increasing. They are in no hurry to invest in instruments that promise high returns and soberly assess the risks.
“Among investors especially popular are the mixed Fund investing in equity and debt securities. The average cash inflow to the group funds amounted to 29% of the net asset value at the beginning of the year,” said analyst UK “the alpha-the Capital” Artem Kopylov. According to him, the ruble bond funds continue to attract most of the investors, the cash flow in these funds amounted to 24%.
Some industry funds were the most attractive to investors. For example, rising prices of raw materials, the average yield of funds in the oil and gas sector amounted to 6%. The weak ruble will also have a positive effect on the income of oil companies. According to Kopylov, bond funds remain attractive, especially given last April correction, which increased the potential for lower returns in the continuation of the cycle to reduce the key rate of the CBR.
“We see a major influx of money into bond and mixed funds. Investors are willing to take reasonable risks for the sake of return in excess of Deposit rates by 3-5%,” — said marketing Director of “BKS Capital” Karen Kesoyan.
In addition, according to him, investors turned their attention to funds that invest in international markets. “For example, the U.S. stock market shows good growth the first year, and 2018 may be his one year of growth. In a situation of instability in the Russian stock market investment of at least part of the money in foreign currency assets will help to protect savings from the risks of weakening of the ruble,” — said the expert.
This is sound advice. The Russian stock market in the beginning of the year looked pretty good — the values of the MICEX and RTS indexes grew. But then came sanctions on several Russian companies and officials, which provoked a fall in the index. “At the moment, see two versions of events. If the parties engage in dialogue in search of a compromise, the situation in the stock market will improve. Indeed, despite recent developments, the Russian market remains one of the most attractive for investment,” said managing Director of “Sberbank Asset Management” Evgenie Korovin. If the tension will grow, foreign investors can arrange the sale of Russian assets, which could lead to new lows in the stock market.
Many analysts draw Parallels with 2014, which is not quite correct — now the situation is different for the better. First, in 2014, falling oil prices, now they grow. Second, the Central Bank through the crisis, accumulated experience, they have the levers to control the situation. And third — these were not new sanctions, expanded the list of those who fall under has already been introduced. “Most issuers have adapted to the weak ruble and cheapened commodities, and therefore, the credit quality of issuers is now better. For example: the index of state bonds Federal loan bonds decreased by 1.34% in 2014, the decrease was much stronger. However, bond funds this decline is “played” literally 3-4 months, once again was a plus and continuing growth,” said Korovin.
It is no secret that in moments of severe decline in the market opens the so-called “window of opportunity” when you can invest. The long-term OFZ yield rose to 7.7%, the yield of long-term sovereign Eurobonds of the Russian Federation — to 5.4%. Eurobond yields high-quality Russian companies at the moment already 5-6%. But do not forget that an increase in volatility connectedness comes increased risks. For those who prefer not to take the risk, you should pay attention to conservative products: mutual Funds bonds low-risk IMS with trust management.
The decline of the ruble is partly played into the hands of mutual funds that invest in dollar-denominated bonds. Even despite a slight decrease in the first quarter of such funds, which was due to the decline in market interest rates on dollar bonds in global markets, in ruble terms, their shares increased. So that funds are dollar-denominated bonds may become the “safe haven” to wait out the storm.
“In January–March in the portfolios of the funds under our management is the main profit brought paper oil and gas and financial sectors, in particular the shares of LUKOIL, Gazprom Neft, Sberbank and TCS. In the case of normalization of the political situation in the second quarter this trend may continue,” — says Executive Director of “URALSIB” Ivan Fomenko. In his opinion, look promising also the shares of “Gazprom”, “Rosneft”, “Children’s world”, “Yunipro” and “Aeroflot”.
“In terms of stabilizing the situation in the debt market the most attractive look medium and long-term high-quality corporate bonds “Gazprom Capital”, “Gazpromneft”, “Rosneft”, MTS, Russian agricultural Bank and medium-term bonds developers “Etalon LenSpetsSMU”, LSR, guaranteeing a yield of about 9% per annum. Among bond funds, the Fund of “Conservative” has demonstrated excellent dynamics, showing for the 1st quarter of 2018 yield of 2.96%,” — said Fomenko.
Despite the unrest, the Russian market remains attractive. Steady decline in rates on deposits makes it increasingly attractive investment instruments, especially mutual Funds. Also contribute to the growth of the dividend yield (average dividend yield of Russian shares is about 6%) and the continuing growth potential of the market value of shares and the market in General. “If the situation is stabilized (no risk of military conflict in Syria, the failure of the US sanctions on the Russian national debt, etc.). and the absence of new major shocks in the market the MICEX index may well add up to 20-25% in the medium term”, — said the head of Department of investments UK “Raiffeisen Capital” Vladimir Vedeneyev.