Results of 2019: which assets turned out to be the most profitable for Russian investors

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In the fall of 2019, we wrote about which assets bring the greatest profit to Russian investors. Then, among the most successful investments were foreign currencies and precious metals. It is time to see how the situation has changed since then.

Note: any investment activity carries a risk of financial loss, this should be remembered. A significant part of the assets described in the article can be purchased on the exchange – for this you need a brokerage account, you can open it online. You can study trading software and practice performing operations using test access with virtual money.

Currency: already not the most profitable asset

Earlier, the American dollar became one of the most profitable assets – last year it went up by more than 20%. Particularly successful then were investments in foreign exchange on the exchange market, where you can buy it at a more favorable rate than in exchangers and banks. Also, some investors were able to extract additional profit by putting the currency bought on the exchange on deposits.

According to recent data from RBC, later the currency has ceased to be such a profitable investment. So, those investors who would have bought at the beginning of 2019 dollars for 50 thousand rubles by the end of the year would have remained with only 44.4 thousand. With the euro, the situation is even worse – 50 thousand rubles invested in European currency would turn into 43.3 thousand per year.

This fact is explained by the strengthening of the ruble – from 69.82 per dollar at the beginning of the year to 62.03 rubles at the end (from 79.99 per euro to 69.31 per euro).

Bank deposits: low yield

In recent years, bank deposits have not brought significant income. So, according to the Bank of Russia, the average rate on them in January 2019 amounted to 6.1%, and in November its historical minimum was fixed – 6.03% per annum. As a result, 50 thousand rubles sent to a deposit at the beginning of the year by its end would have grown only to 53.1 thousand.

It was low deposit rates that became one of the reasons for the surge in interest in exchange investments among Russian citizens. So in 2019, the number of private investors on the Moscow Exchange exceeded 3.5 million people. Since the beginning of the year, 1.6 million investors have opened brokerage accounts for trading on the exchange.

Russian stocks and bonds: good results for the year

At the end of 2019, the shares of Russian companies became the most profitable investment. According to RBC analysts, on average, such investments could bring up to 38.7%. That is, when buying stocks of 50 thousand, by the end of the year the value of the portfolio could increase to 69.3 thousand.

Another instrument of exchange investments, which showed good results in the past year, is government bonds. Their average yield was at the level of 19.8% per annum, that is, 9.9 thousand rubles per year with initial investments of fifty thousand.

Government bonds themselves are a low-risk investment tool (a government refusal to pay a bond would mean default). You can increase profitability by using IIS accounts, which allow you to receive special benefits. Read more about such strategies here.

Domestic companies can also issue bonds, in 2019 this instrument also showed good profitability parameters. For a year, earnings from investments of 50 thousand rubles could reach 57.1 thousand.

Foreign stocks: an increasingly attractive asset

In the last couple of years, it has become easier for Russian investors to invest in foreign stocks. It is now possible to buy securities of foreign companies directly from Russia without opening an account with a foreign broker on the St. Petersburg Exchange.

The most popular stocks of foreign companies among Russian investors are securities of Apple, Alibaba, Amazon and Tesla. In total, more than 1,200 shares of American companies are now listed on the St. Petersburg Exchange. Transactions with them are concluded monthly by 70 thousand investors.

In 2019, taking into account possible dividends, the return on such investments could reach the level of 31.5% in dollars. However, in the case of foreign stocks, the value of which is calculated in dollars, at the beginning of the year their purchase would take place at one rate, and then after their sale profit-taking would be carried out at a different rate. As a result, the real return was at the level of 16.8% (with investments of 50 thousand at the beginning of the year, 58.4 thousand could be obtained at the end)

Conclusion

It is important to understand that the calculations of the profits of RBC experts are presented excluding tax payments. According to the law, taxes do not have to pay profit on deposits and government bonds, and owners of IIA accounts that use them for investments can also be exempted from paying tax.

Even taking into account this fact, conservative investments in exchange-traded assets turn out to be more profitable than bank deposits. That is why the number of private investors in Russia is growing. At the same time, often many of them use low-risk instruments (model portfolios, structural products), and also do not completely refuse bank deposits. Their important plus is the availability of a deposit insurance system, an analogue of which for exchange investments has not yet been launched.

Useful links on the topic of investment and stock trading:

• Open a brokerage account online
• Test account with virtual money
• Software for trading on the exchange: trading terminal, mobile applications
• Structural Products
• Model Portfolios

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