Sberbank : Commodity funds generate highest yield among other mutual funds in 1H

In the first half of 2021, the Russian market for collective investment kept growing. Against the background of the global economy's rapid recovery after lockdowns and the growing demand for oil, mutual funds investing in securities of commodity companies enjoyed the highest profitability in January-June.

Individual Russian investors grew persistently interested in equity and hybrid investments as early as in 2020. It was spurred on by the increased yield securities produce as compared to deposits and by the growing availability of tools to manage your funds.

This trend continued in the first half of 2021. Investment funds are seeing the number of their shareholders go up, approaching four million people. In terms of the number of attracted investors, exchange-traded mutual funds are still in the lead, mainly due to their low entry threshold, high liquidity and transparency.

Highest yielding

In the first half of the year, the investment efficiency of securities issued by Russian commodity companies was excellent. The Natural Resources Fund ranked in the top 10 mutual funds in terms of profitability, according to InvestFunds, having gained 18.97% in six months. This was facilitated by the rise in commodity prices, in the oil and gas sector among others.

Another trend that emerged in the first half of the year is that investors increase the profitability of their portfolios by moving their money from bond funds to equity funds in a growing market.

Most popular funds

On the Russian market, the Balanced Fund enjoys stable demand among investors. It is the most popular mutual fund when it comes to portfolio diversification. Its shareholders use the stock market opportunities while not increasing the overall investment risks significantly due to the fact that some of the fund's assets are mainly invested in bonds of Russian issuers. In 1H, it attracted over RUB 13.5 bn in investments.

The list of instruments popular among investors also includes the MOEX Russia Total Return Fund, which invests in the most liquid equity and depository receipts of the largest and fastest growing Russian issuers listed in the MOEX index. Russian issuers saw their securities appreciate in late June, so many view this strategy as a long-term one for the next three years. In January-June, Russians invested about RUB 7.7 bn in this exchange-traded fund.

Choosing bonds

However, the stock market has grown steadily for three quarters in a row, and many investors are worried about a possible retracement or reversal. Therefore, some shareholders chose investment funds focused on bonds. For example, the Dollar Bonds fund and the MOEX Corporate Ruble-Denominated Bond Index. In 1H, Russian shareholders invested RUB 7.1 bn and RUB 5.8 bn in them, respectively.

In the first half of the year, both of these funds continued to increase the share of issuers from developing and developed nations, focusing on quality borrowers with credit ratings from BB to BBB. As market sentiment improves, the inflow of investor funds into this segment of the market is expected to continue, which will support the bond quotes. An attractive coupon yield on these instruments will also contribute to the overall portfolio yield heavily.

The half-year results show that individual investors' interest in capital markets keeps growing in Russia. This is facilitated by the availability and transparency of tools for managing your assets. We work continuously to improve the quality of our services to meet customer demand. In June, we were the first to launch smart funds in Russia on the Moscow Exchange. Now anyone can choose a fund that suits them, regardless of how much they know about the market.

Evgeny Zaitsev

CEO, Sber Asset Management

The text cites data from the Bank of Russia and the InvestFunds ranking of open-end mutual funds with a net asset value starting at RUB 1 bn in terms of yield and investments attracted to open-end and exchange-traded funds between June 1 and 30, 2021.

More on the 1H21 KPIs of mutual and joint-stock investment funds in rewiew_pif_aif_21Q1.pdf (cbr.ru).

OPIF RFI Sber - Prirodniye Resursy (Natural Resources)

OPIF RFI Sber - Fond Sbalansirovanny (Balanced)

BPIF RFI Sber - Indeks Mosbirzhy Polnoy Dokhodnosti Brutto (MOEX Total Return)

OPIF RFI Sber - Dollaroviye Obligatsii (Sber - Dollar Bonds)

BPIF RFI Sber - Indeks MosBirzhi Rublyuvykh Korporativnykh Oblitatsiy (MOEX Corporate Ruble-Denominated Bond Index)