Private investors shuffle shares
Traditionally, with the onset of the summer holiday season, the collective investment market is calm. However, in June there was no trace of serene calm. Inflows to many funds, on the contrary, increased sharply. Due to their simplicity, mutual funds, like bank deposits, remain the most popular tool for saving and increasing capital for citizens. On what shares you can make good money, MK understood.
Alfa Capital Analyst Alexander Dzhioev drew attention to the shift in the focus of investors from conservative (bonds) and ultra-conservative (money market) funds to more risky (mixed funds). “In equity funds, the results on inflows are mixed so far. It is felt that a significant part of investors are still looking at the stock market with some distrust. The most popular are bond funds and funds that provide for the payment of income to shareholders,” the analyst noted.
As Ivan Sokolov, Deputy General Director of Finam Management Management Company, Ivan Sokolov told MK, funds that assume regular payment of income began to appear on the market from the II quarter of last year. Their popularity is confirmed by the fact that in the 4th quarter of 2022 and in the 1st quarter of the current year, these funds accounted for about half of the issuance of investment units of all open-ended investment funds in the Russian collective investment market.
According to Sokolov, interest in the funds is also growing Russian stocks: «Investors expect further market recovery, and part of the funds in Russian stock funds was directed from bond funds after investors took profits.»
Alexander Lavrov, Investment Director of East-West Management Company, noted at the beginning of summer a strong flow of funds from one fund to another. At the same time, there is no obvious preponderance of inflow over outflow. Investors willingly invest in both equity and bond funds. The largest outflow of funds, according to him, affected the funds of mixed investments and bond funds. “Exchange-traded and open-end funds are popular due to the availability for individuals in terms of acquisition amounts and the absence of time limits on holding shares,” Lavrov explained.
In the near future, the first investment fund for replacement bonds will appear on the Russian collective investment market. Relevant information appeared in the register of mutual funds of the Central Bank. The fund will invest in the best replacement bonds traded on the Moscow Exchange and will be available only to qualified investors.
Another interesting trend has emerged in the real estate investment fund sector. At the beginning of June, on the Moscow Exchange, the shares investing investors' funds in warehouses, offices and residential complexes have noticeably risen in price. As Natalya Milchakova, a leading analyst at Freedom Finance Global, explained, the trend was formed due to a number of factors. First, many investors have reinvested dividends received in late May and early June from blue chip companies. Secondly, the liquidation of the PNK-rental real estate mutual fund, which provided the owners of its shares with liquidation dividends, which could also be reinvested in more reliable real estate mutual funds, had an effect. Thirdly, the demand for such units supported the decision of the authorities to maintain the preferential mortgage program. This supported high prices for new buildings.
Usually, investors who prefer to receive a stable passive income enter real estate funds at the stage of their formation. At the end of June, by the way, the formation of a closed mutual investment fund began, which plans to invest the funds of shareholders in a new residential complex. The purchase of apartments under a share agreement will be carried out on the basis of an exclusive discount for a wholesale purchase (20–25% of the market value).
According to Natalia Milchakova, summer is a good time to invest in real estate. The upward trend in quotations of such shares may continue. Also, in her opinion, units of mutual funds investing in precious metals are attractive. Prices for them may rise due to the fact that the US Federal Reserve is gradually abandoning the tightening of monetary policy. This will weaken the dollar and, accordingly, increase the attractiveness of its competitors — gold and silver. “You can also look at index funds. The Moscow Exchange and RTS indices are already recovering after last year's collapse. There is a possibility that the Bank of Russia will raise the key rate in the second half of the year. In this case, investments in shares of bond funds may become attractive,” Milchakova added.
In the summer, according to Dzhioev, a slight correction in equity funds is likely against the backdrop of the end of the dividend season, as well as the desire of some investors to fix received profit. On the other hand, the growth trigger may be the resumption of the publication of financial statements by issuers from July 1. According to the analyst, bond funds with corporate issues in their assets are suitable for conservative investors — now the yield on such bonds is above historical levels. “Thanks to the constant influx of new replacement bonds, mutual funds began to appear, focused exclusively on such assets. As a result, investors can get a fairly high foreign exchange yield in the absence of infrastructure risks,” Dzhioev concluded.