Renaissance Asset Managers is quickly establishing itself as an expert in unloved emerging markets. While its Russian Equity Allocation Fund is still relatively new to market, having been launched in July 2011, it has got off to a good start, markedly outperforming its benchmark - the MSCI Russia 10/40 - since inception.
The fund, which is managed by Dmitry Mikhailov, seeks to deliver capital growth through an active asset allocation approach between equity securities and cash instruments. Mr Mikhailov aims to be defensively positioned during times of market weakness and fully invested during times of market strength. He anticipates the fund will exhibit a high degree of volatility with respect to the index over short periods of time, but the objective will be significant outperformance of the index over a rolling three- to five-year time period.
The fund's assets may be hedged against different currencies at the discretion of the investment manager, although the fund has a sterling share class for sterling investors.
The fund lagged the June rise in the MSCI Russia 10/40 benchmark by around 4 per cent. This was largely due to its cash balance as well as its positions in energy and materials. The manager expects Russia to close the performance gap versus the rest of the region and is continuing to buy into compelling valuations.
The fund is at the pricier end of the spectrum, especially for retail investors, who have to pay an annual management fee of up to a maximum 2 per cent, within which a performance fee is included. There are also one-off charges taken before you invest and if you exit the fund.
| RENAISSANCE RUSSIAN EQUITY ALLOCATION FUND R | |||
| PRICE: | $8.59 | SHARPE RATIO | 0.59 |
| STRUCTURE: | Ucits IV Sicav | 1-MONTH PERFORMANCE: | 2.36% |
| DOMICILE: | Luxembourg | 6-MONTH PERFORMANCE: | -11.44% |
| FUND SIZE: | $13.08m | PERFORMANCE YEAR TO DATE: | -5.20% |
| No OF HOLDINGS: | na | ONGOING CHARGES: | 2.00% |
| SET UP DATE: | 1 July 11 | YIELD:: | na |
| MANAGER START DATE: | 1 July 11 | MINIMUM INVESTMENT: | $2,000 |
| BETA: | 1.15 | MORE DETAILS: | renasset.com |
Source: Investors Chronicle funds data & Renaissance
Performance figures as at 18 July 2012
Top 10 holdings (as at 30 June 2012)
| Company | Percentage |
| Lukoil ADR | 9.70 |
| Sberbank | 9.60 |
| Gazprom ADR | 8.80 |
| Tatneft ADR | 4.80 |
| Rushydro ADR | 4.10 |
| Norilsk ADR | 3.80 |
| VTB Bank GDR | 3.80 |
| Sistema GDR | 3.70 |
| Magnit ADR | 3.60 |
| Rosneft GDR | 3.50 |
Sector breakdown
| Sector | Percentage |
| Energy | 38.60 |
| Financial | 16.20 |
| Basic materials | 14.90 |
| Communications | 12.20 |
| Utilities | 9.60 |
| Consumer, non-cyclical | 5.20 |
| Industrial | 1.30 |
| Consumer, cyclical | 0.80 |
| Cash & equivalents | 1.30 |
