Alpcot Capital Management, an asset manager focused on investing in Eastern Europe, has launched an actively managed Russian equity exchange traded fund.
The Alpcot Active Greater Russia ETF is physically-backed so it will invest in the equity issued by companies based in Russia and other states of the former Soviet Union region.
The fund’s portfolio will be is separated into two baskets of “disclosed portfolio securities” and “non-disclosed portfolio securities”.
The company will reveal details of the disclosed portfolio securities which will typically make up to 80 per cent of the ETF but the disclosed portfolio securities will remain hidden.
Alpcot says this partial disclosure of the ETF’s holdings will enable it to mitigate any risks of being exposed to front running or portfolio duplication.
Alpcot also maintains that although market makers will not know the ETF’s entire holdings, they will not be deterred from trading the fund as the company will provide an indicative intra-day net asset value estimate.
Bjorn Lindstrom, a founding partner and portfolio manager at Alpcot, said depressed equity valuations in the greater Russia region offered an opportunity for long-term investors who seeking an entry point to a fundamentally attractive market.
“However, Greater Russia is also a less researched market, and the true value of opportunities in the region can only able to be exploited by experienced active managers,” said Mr Lindstrom.
Alpcot is planning to start a marketing campaign next week for the new ETF in partnership with Avanza and Nordnet, two of Sweden’s largest online brokers.
The fund, which has an annual management fee of 1.4 per cent, was listed on the Nasdaq OMX exchange in Stockholm today (Tuesday) and Alpcot is planning further cross-listings on other stock exchanges around Europe, depending on the level of interest received.
Get alerts on Exchange traded funds when a new story is published