Last week we wrote about the amazing year to date performance of the Brazilian equity market. Despite all the awful headlines and negative investor sentiment the Brazilian market was up over 20% and last week it went up a further 4%.
A similarly widely disliked equity market fraught with negative headlines having a great start to the year is Russia.
Russian equities were up 2.5% last week and in 2016 they are up about 11%. Not bad for a market that like Brazil comes with lots and lots of baggage.
All resource-oriented equity markets have benefited from the resurgence of commodities and both economies are expected to contract further in 2016, but Russia and Brazil are not cut from the same cloth.
There are at least three key differences that investors should note before lumping these emerging markets together:
- Economic Sector Composition
- Fundamental Drivers of Return
- Value Add of Top-Down versus Bottom-Up Implementation Approaches
Click to read the full report Can This Russian Bear Learn To Samba?
Eric J. Weigel
Managing Partner of Global Focus Capital LLC