As is the case with Canadian investors most US investors focus on domestic equities. The problem is missed investment opportunities by disregarding other countries. This includes Russia, a country that has been making headlines lately. *Here are 3 reasons why to invest in Russia:
- Cheap Valuations – Russia equities are cheap compared to both historical averages and other BRIC nations. The Russia MICEX Index is trading at less than 6x earnings compared to its 10 year average of 9x earnings. Russia also normally trades at a 30% discount compared to its BRIC counterparts. That number has reach to over 50% enforcing the idea that Russia is trading at a discount.
- Surprising Profitability – The average ROE on the MICEX exchange is more than 18%.
- Interesting Energy Play – Russia has become one of the top suppliers of oil.
Clients that are looking for a more aggressive play on emerging markets should consider the Excel Emerging Europe Fund. Year to date the fund is up more that 12%. Russia makes up around 60% of the portfolio with Turkey representing just shy of 15% and Poland around 13%. The Emerging Europe Fund is a unique product and an opportunity for investors. It’s time to take advantage of an emerging story that isn’t going away any time soon.
Written by Jeff K.
*Koesterich, R. (2012, November 4). 3 Reasons to Consider Russia. Seeking Alpha. Retrieved November 5, 2012, from http://seekingalpha.com/article/976451-3-reasons-to-consider-russia
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