Russian Assets Regain Appeal for Investors - WSJ

Investors have taken Russia out of the penalty box.

The ruble has gained 17.5% in 2015 against the U.S. dollar, after losing nearly half of its value in 2014, according to financial-data provider CQG. It has soared 46% from an intraday record low set in December.

Russia’s stock index denominated in the ruble has soared 20% this year through Monday, after losing 7.15% for the whole of 2014, according to FactSet.

The nation’s sovereign bonds denominated in the local currency have returned 16.86% this year through Monday, after losing 16.61% during 2014, according to data from Barclays PLC.

While the Russian economy remains mired in recession, other fear factors have subsided this year. Prices of crude oil, one of the country’s key exports, have bounced off a six-year low. A cease-fire has eased geopolitical tensions in Ukraine.

For investors seeking higher-yielding investments, Russia has become a prime destination. The central bank’s key interest rate is 14%, compared with rates at or near zero in the U.S., eurozone and Japan.

“Russia is the high-yield story,’’ said Geoffrey Pazzanese, senior portfolio manager at Federated Investors, which has $362.9 billion in assets under management. “The ruble was oversold, and there has been a big change in terms of conditions from last year.”

Complete story at - Russian Assets Regain Appeal for Investors - WSJ