Russia: Caveat emptor?

RUSSIA

Stefan Herz, portfolio advisor to the Charlemagne Magna Eastern European fund, says the best ‘value traps' in Russia can be found by breaking down opportunities into three ‘tiers'.

Few markets divide opinion amongst investors as much as Russia. Many loyal eastern European fund managers will happily spend hours arguing that despite its many shortcomings, the country represents a very attractive investment opportunity. Meanwhile, other global investors will be quick to dismiss the market as opaque, riddled with corporate governance issues, and too focused on commodities. As always, the truth probably lies somewhere in between. While there have been many cases where minorities have been treated badly, and the depth of the market is not yet as great as it should be, ...