Russian stocks are a steal – but does that make them a good bet?

Political uncertainty is a big red flag, but if you’re still bullish, avoid individual Russian equities and plump for a passive fund instead, says David C Stevenson.

Political uncertainty is a big red flag, but if you're still bullish, avoid individual Russian equitiesand plump for a passive fund instead, says David C Stevenson.

One stock market in the world today represents either the single greatest opportunitywithin emerging markets or the single biggestvalue trap. If you hadn't guessed it already, I'm talking about Russia.

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Baring Russia (A Inc USD)-9.6%11.9%-17.7%
HSBC GIF Russia Equity-5.7%10.9%-12.1%
JPM Russia (A Dis USD)-7.4%10.6%-15.4%
Neptune Russia & Greater Russia (A Acc GBP)-14.1%16.2%-17.6%
Neptune Russia Special Situations (A Acc GBP)-14.2%N/A-18.9%
Pictet Russian Equities (P dy GBP)-14.3%23.6%-15.9%
db x-trackers MSCI Russia Capped Index UCITS ETF 1C-13.37%12.96%-15.2%
db x-trackers MSCI Russia Capped Index UCITS ETF 1C GBP-13.34%3.59%-15.42%
HSBC MSCI Russia Capped UCITS ETF-13.15%N/A-15.12%
HSBC MSCI Russia Capped UCITS ETF GBP-13.94%N/A-16.07%
iShares MSCI Russia ADR/GDR UCITS ETF GBP-12.41%N/A-14.85%
iShares MSCI Russia ADR/GDR UCITS ETF USD-12.44%N/A-14.7%
Lyxor UCITS ETF Russia (Dow Jones Russia GDR) D-GBP-12.92%N/A-15.82%
Lyxor UCITS ETF Russia (Dow Jones Russia GDR) D-GBP USD-15.06%N/A-16.29%
RBS Market Access Daxglobal Russia Index Fund GBP-10.96%N/A-14.15%
Source RDX UCITS ETF-13.71%N/A-15.81%
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Energy35.30%
Consumer and telecoms22%
Mining17.3%
Financials16%
Industrials3%
Lukoil9.9%
Magnit9%
Gazprom8.6%
Sberbank8.35%
Severstal5.3%
David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.