Russia: Mainstream exuberance?

Even pension funds are showing an adventurous streak and investing in Russian equity. A tremendous inflow of foreign capital and an increasing foreign ADR market has made Russia the world's best performer so far this year and left some fund-managers waiting for a correction.

RUSSIA: THE NEXT CHAPTER

An increasingly wide group of institutional investors, high-net-worth individuals and retail investors are providing the new capital to make Russia the world’s best performing equity market so far this year. The MT-50 share index is up nearly 200% in dollar terms, while the RTS index of 22 leading stocks has risen 166%. Demand continues to be funnelled through American Depository Receipts (ADRS), which have kept the blue chips active. However, newly-formed Russian equity funds are exploring lesser-known shares, and there is an expanding universe of attractive and undervalued companies.

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