After a nine month dreadful equity streak for 2020, Russian equities came alive in the fourth quarter and the market posted a gain of 20% to help reduce the year’s loss to a low teen number.  Retail investors in Russia have opened a wave of new equity trading accounts and the wave of fresh cash into the market resulted in the strong finish.

2020 marks a year where we saw Russian equities go thru risk off, risk on.  It helps also that the oil price is back to 60 dollars.  The views on Russia still suffers abroad from the Ukraine situation, Navalvy in jail, the uncertainty over the North Stream pipe project and possible increase in sanctions by the EU.

A new President in the white house has to demonstrate policy and views towards Russia and represents uncertainty as Democrats tends to have a more uneasy relationship towards Russia.

Russians have weathered the covid storm fairly good and now the Russian covid vaccine, called the Sputnik, is available to its population, safest alternative as stated to us, free for everyone, available anywhere.

Given an oil price above the government’s conservative stand going into 2020 enabled a surplus to be added to the savings.  Given the underperformance of the Russian market vs developed markets and many other emergings markets in 2020, the market appears attractive relative to its peers.

Domicile: Bermuda
Source: Bloomberg LP, AP Asset Management, PCM