Europe's Biggest Money Manager Is Staying Bullish on Russia

(Bloomberg) -- Europe’s largest asset manager is tuning out noise from a deepening diplomatic spat and holding on to a big overweight in Russian bonds and the ruble.

Sergei Strigo, the head of emerging-market debt and currencies at Amundi Asset Management, says he “doesn’t see any reason” for the rising geopolitical tensions to damp his bullish view on Russian assets. He took part in the government’s $4 billion Eurobond sale, which came one day after the U.K. blamed Russia for poisoning an ex-spy on British soil.

Europe's Biggest Money Manager Is Staying Bullish on Russia

“We still like Russia as an investment opportunity,” Strigo said from the London offices of the $1.8 trillion asset manager. “With oil prices at these levels, macroeconomic indicators in Russia remain very strong.”

Like many other investors who have grown used to bouts of political risk in Russia since the annexation of Crimea in 2014, Strigo is betting the tensions won’t be sufficient to curb the appeal of debt offering some of the highest real yields in emerging markets. So far, the U.S. and European authorities have sought to punish Russia only through diplomatic channels, expelling more than 100 diplomats on Monday.

Russian stocks and the ruble have already recouped some of their losses from the dip after news about the diplomat expulsions broke on Monday. The ruble is on track to post a small quarterly gain against the dollar and credit risk is falling after touching a six-week low. Many investors are waiting to see how Russia responds to the expulsions before deciding what to do next.

Strigo says he’s watching the situation closely but is much more focused on macroeconomic indicators, such as the Russian central bank’s gradual approach to monetary easing and the rising price of oil. Restrictions imposed on Russia over its annexation of Crimea don’t prevent investors from buying government bonds.

“As long as sanctions don’t impact investing in Russian assets in general, then there is no change,” Strigo said. “We have been overweight Russian assets for a while, that’s a view we are sticking with.”

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