Danske Invest Russia reaches three years: Receives four stars

Danske Invest Russia has now built a long enough track record to be rated by the research agency Morningstar. The sub-fund has received the second highest score: Four stars. Obviously, portfolio adviser of the sub-fund, Olga Karakozova from Danske Capital is satisfied with the acknowledgement. This is so because the past three years have been highly turbulent.
 
”Despite a very difficult market and high volatility, the sub-fund has provided results outperforming its benchmark during the past three years,” says Olga Karakozova. Last year Danske Invest Russia provided a 14.81 pct. return against a 10.75 pct. benchmark increase.

Olga Karkozova explains that the sub-fund is pursuing a carefully planned strategy which has been maintained for the past three years and which we do not plan to change. Within this strategy, domestic growth is an important element.
 
Focus on domestic growth
“The sub-fund is focusing on domestic growth and infrastructure names rather than on exporters such as oil and gas companies. Domestic growth names offer very strong earnings growth and are trading at a discount to emerging market peers. Therefore, we are convinced that sectors benefitting from the domestic growth in Russia offer the most attractive investment opportunities in the long run,” explains Olga Karazokova.

She also expects that the development in the Russian stock market will remain positive for the remaining part of the year.

"We are convinced that the investment case for Russia remains strong. The market is inexpensively priced, and the non-exporting companies are experiencing strong earnings growth. The macroeconomic situation is also stable with a low government debt and a balanced budget,” explains Olga Karazokova.

Since the turn of the year, the sub-fund has provided a negative return of 3.02%. This represents an outperformance of its benchmark.

On a risk scale from 1-7 the sub-fund Russia is assigned ‘7’, where 1 is an expression of the most stable sub-fund in terms of price.

Below you can see a video with portfolio adviser Olga Karazokova in which she is giving a presentation on Russian equity investments.