The Contrarian Investor: The Russian conundrum

What should we do about Russia as an investment opportunity? Until recently, I have been incredibly negative about Russian equities, but I have largely been happy to let the numbers speak for themselves.

Over the last few years, most mainstream Western investors have chosen to ignore the Russian markets. Talented managers like Robin Geffen over at Neptune (manager of the Russia & Greater Russia fund) may rail against this cynicism and distrust, but so far it has proved to be a fairly sensible decision. Russian equities have not performed quite as badly as many would expect – with most benchmarks showing 20% gains over the last three years – but why bother taking all the obvious risks when one could have notched up 40% returns on mainstream US equities and 25% on UK shares? The char...