Five ‘unloved’ investments worth a fresh look
By Jassmyn Goh, 18 Apr 18
Long term investors should seek out some often over-looked sectors to boost portfolio diversification, according to Morningstar Investment Management. Click through the slides below to find out which five areas it has identified as hidden investment opportunities.
Source: FE Analytics
On Russian equities, Kemp said that societal concerns aside, there was an opportunity to benefit from Russian anxiety stemmed from politics.
“If European energy is a concern to some, Russian equities must be outright disturbing to others… We continue to look favourably on Russian equities, especially relative to many of the expensive developed market peers,” Kemp said.
“We have witnessed a gradual improvement in earnings, cash flows and dividends – all growing faster than western peers in nominal terms.”
He noted that the negative sentiment towards Russia depressed the price people paid as the average investor was only willing to pay about half as much for Russian equities compared to the global equivalent.
“Over the very long term Russian risk is likely to remained elevated, although it could easily subside from current levels. This collective overreaction should therefore gradually subside too, meaning Russia could benefit from a tailwind of both stronger earnings and improving sentiment,” he said.
FE Analytics data found over the five years to 31 March 2018 Russian indices returned between 10.82% and 16.76%. However, over 10 years the indices returned between -15.01% to -7.53%.
Tags: Investment Strategy | Russia | US
