Has mentioned in the launching of our first contract as advisors, the SICAV - Optimize Invest Selection is a balanced fund portfolio oriented for long-term savings composed of equity funds and bond funds. It is exposed to shares from the Eurozone countries; Switzerland; Sweden; United Kingdom; Russia; Japan; South Korea and Canada.
The Fund bears to European High Yield, US Dollar, American High Yield, Norwegian Krone, Swedish Krona and Japanese Yen in the bond component.
Perspectives
Russia has done a great deal of work to stabilise its economy. After years of austerity, the diversification of its activity by stimulating different sectors — such as agriculture — and sound monetary policy management makes the country much more resistant to shocks.
The way to get there was tough. There has been little growth over the last decade due to the West's sanctions: access to Moscow for foreign investors has been limited.
Before Covid-19, the situation improved with the resumption of the price per barrel of oil being beneficial to the state treasury. Despite the pandemic's negative impact, the economy has shown resilience, and Russia has managed to keep the recession relatively contained. According to the International Monetary Fund, GDP is expected to recede by 3.6% in 2020.
The prospects for 2021 are encouraging as they point to a 3% growth in the economy, benefiting from the recovery of oil prices (60 dollars per barrel).
Also, the authorities have the means to boost activity through budget support. However, despite the favourable signals, there are still clouds on the horizon.
From the outset, the rate of vaccination continues to raise uncertainty as to the degree of recovery. Then the main trading partners continue to operate with solid restrictions due to the containment.
In addition, inflation levels require attention despite the prospect of falling from last year. Finally, geopolitical risks and challenges are multiplying in the face of Russia's positions that could spark further economic sanctions by the West.
In summary, the scenario is favourable to the strong fiscal and monetary response as well as to the healthy banking situation. Still, the perils in this region are substantial and cannot be neglected.
Strategic allocation
This market's risk is high, but Russian equity funds offer an attractive expected return for the long term. If energy companies predominate, other sectors begin to attain substantial weight on the Moscow Stock Exchange.
We reserve 5% of the portfolio in this region in a diversification logic through investment funds or equity ETFs.
Definitions:
Mutual fund – A mutual fund is a professionally managed financial product – investment fund - that gathers money from many investors to buy securities: bonds, share or both. The advantage of this product compared to direct investment - direct purchase of shares or bonds - is that by joining many investors, the amounts available to invest considerably increase, which reduces costs and diversifies the investment (a more significant number of securities purchased).
This option is the most recommended for those who do not have much money (tens of euros are enough to invest), time to monitor the investment very regularly on a daily basis (there are fund managers who do this for you) and who have little knowledge of the financial markets.
ETFs - An exchange-traded fund is an investment fund traded on the Stock Exchange as if it were a stock. An ETF can also be called an index fund.
Most ETFs track an index, such as a stock index or bond index