Greetings! In my posts, I often wrote about ETFs - an ideal investment tool. The problem is that it is convenient to invest in exchange-traded funds abroad, and not in Russia. Of course, Russians can also access them (there are ways). But this is many times more difficult and more expensive than buying a share of a domestic mutual fund.
Fortunately, in 2013 the situation changed. Irish ETFs under the FinEx ETF brand (12 funds in total) appeared on the Moscow Exchange. From now on, private Russian investors can directly enter the international securities market. At the same time, they remain under the jurisdiction of Russia and do not lose tax benefits.
So, I’m starting a review of FinEx ETF on the Moscow Exchange! At the same time, I recommend the FinEx Facebook page. Interesting news is constantly published there (and not only about the company’s products).
Gold. FinEx Gold ETF (FXGD)
Finally, we have a full-fledged gold fund. The asset value of the FinEx Gold ETF is 100% linked to the price of gold. Purchasing fund shares can be used as an alternative to impersonal metal accounts. One FXGD share is equivalent to 0.22 grams of gold. It is denominated in US dollars and replicates the LBMA Gold Price AM/USD index. The commission for the investor is only 0.45% per year.
The spread when buying gold on the exchange through an ETF is 16 times less than the spread on compulsory medical insurance in gold in large Russian banks. You can buy or sell FinEx Gold ETF through any Russian broker on the Moscow Exchange.
Over three years, the shares fell in price by 4.27%, over ten years they increased by 119.94%. At the beginning of October, one share of the FinEx Gold ETF was valued at $9.01 (the minimum purchase is one share).
When will ETF and BPIF trading begin in 2022?
On December 31, 2022, funds will not be traded on the Moscow Exchange. Trading will resume on January 4, 2022 . Until the end of the New Year holidays, trading sessions will also be on January 5, 6 and 8. January 1 and 7 are public holidays.
In the future, the exchange plans to operate according to a standard schedule. The trading calendar for 2022 can be viewed here.
Eurobonds of the Russian Federation. FinEx Tradable Russian Corporate Bonds UCITS ETF (FXRB)
The fund invests in corporate Eurobonds of Russian issuers denominated in rubles. Let me remind you that a Eurobond is a debt security denominated in a foreign currency. FinEx Tradable Russian Corporate Bonds UCITS ETF (RUB) is focused on the EMRUS index developed by Barclays Capital (includes 27 issuers).
Its advantage is that you can invest in Eurobonds without the status of a qualified investor. Through FXRB you can buy just one security at a price of 1228.05 rubles (price at the beginning of October). I note that when purchasing Eurobonds directly, the investor will need tens of thousands of dollars.
The fund's activities are regulated by three authorities: the Central Bank of Ireland, the Financial Conduct Authority (UK) and the Central Bank of the Russian Federation. Issuers in the portfolio: Gazprom, Sberbank, VEB, Gazprombank, Norilsk Nickel, VimpelCom, LUKOIL, Rosneft, VTB, FC Otkritie.
Taking into account ruble hedging, the fund's return was 15.67% for one year, 32.80% for three and 56.05% for five years. Since the launch of the ETF, its value has increased by 48.46%. The investor receives income due to the increase in the price of the bond (including through reinvestment of coupons). Additional profitability is provided by ruble hedging.
The investor fee is 0.95% per year.
Invesco KBW High Dividend Yield Financial ETF (KBWD).
- Assets under management: $420 million.
- Dividend yield: 4.11%.
- Commission: 1.24%.
If you're really looking for yield and want to have some bias towards the financial sector - you may want to consider focusing your bets on that sector.
“A simple way to preserve yield growth potential is to favor short-term stocks over longer-term ones,” says BCA Research. “This means investors should hedge against a rising yield curve by favoring value stocks over growth stocks and financials over technology.”
You can get that opportunity through the Invesco KBW High Dividend Yield Financial ETF (KBWD), which includes only financial stocks and only the biggest dividend payers among them.
The list of holdings is quite small and focused as a result of this tactical approach, with only about 40 components currently in this ETF. The list of names may be unfamiliar to top stocks including Prospect Capital (PSEC), a business development company (BDC), and Apollo Commercial Real Estate Finance (ARI), which operates primarily in the mortgage market.
Obviously, there is a risk when you focus on a small list of stocks in a particular sector, but this also allows KBWD to be one of the most generous high-yield ETFs, eclipsing the returns of funds made up of larger dividend stocks.
TOP 10 Stocks in Invesco KBW High Dividend Yield Financial ETF (KBWD) .
Eurobonds of the Russian Federation. FinEx Tradable Russian Corporate Bonds UCITS ETF (FXRU)
In essence, the company offers to invest in the same Eurobonds, but not in rubles, but in US dollars (USD). On the stock exchange, quotes are displayed in national currency, and the share price is pegged to the American currency. This creates additional protection against ruble devaluation.
Underlying index for the fund: Barclays EM Tradable Russian Corporate Bond Index (EMRUS). The shares are freely traded on the Moscow Exchange (FXRU), the London Stock Exchange and the Irish Stock Exchange. For one year the yield was 10.78%, for three – 12.38%, for five years – 34.03%. Expected current return of the fund: 3.28%. At the beginning of October, one share was valued at $104.07. Investor commission – 0.50%.
Services from broker Finam
I have already clarified that the company constantly monitors the updating and information saturation of the site, offering forums, analytical articles, platforms for discussions, and the latest financial quotes in different spectrums. The symbiosis of technologies and various products for cooperation with investors is always highly valued by potential clients. The company has its own terminals through which you can buy shares, or it is worth carrying out work through the website. Some applications, for example, QScalp, are in some ways similar in interface to individual offers from Alpha.Stream, but are aimed specifically at stock trading.
WhoTraders
This is a kind of branded social network for traders, where you can communicate with your peers, read the latest important analytical materials, and learn more deeply about what a scam project is? It’s interesting, but the company offers not only to read other people’s materials, but also to write your own, supplementing them with screenshots. If you click on “Services” on the website, you can get to Just2Trade, a platform that Finam also bought at one time.
Comon service
Essentially, this is an automatic service that, based on the positive experience of brokers, creates and shapes your strategy for work: from buying local or shares of American companies to working with futures and a specific currency pair. Using a filter system (date, drawdown indicator, account type), you can set up trading in automatic mode. It is useful that the service operates in 2 segments:
- Only signals that it is time to close or open a deal;
- Fully automatic mode.
This makes it similar to some cryptocurrency investments, in particular, some exchanges offer automated programs for fiat or crypto trading.
To summarize, I would like to point out that the Finam holding offers some of the most profitable and attractive offers on the market for work in different segments, and in addition provides information and communication support to traders and participants in the financial world. Traditionally, I wish you that cooperation with a broker will evoke only pleasant emotions and understanding, and if in addition you decide to consider options for generating income, bankruptcy auctions are one of the most promising platforms designed to profitably buy, and then use or sell property.
Author Ganesa K.
A professional investor with 5 years of experience working with various financial instruments, runs his own blog and advises investors. Own effective methods and information support for investments.
US stocks. FinEx MSCI USA UCITS ETF (FXUS)
The fund, through the Moscow Exchange, invests in shares of the largest American companies with maximum diversification. It focuses on the MSCI Daily TR Net USA USD Index, which covers 85% of the US stock market. The portfolio includes more than 600 securities of issuers such as Apple, Microsoft, Exxon Mobile, Amazon, Johnson & Johnson, Facebook, General Electric, Alphabet. I note that since 2012, the US market has grown by more than 65%.
Over the course of a year, the fund’s shares increased in price by 9.26%, over five years – by 100.57%, over ten years – by 87.38%. At the beginning of October, one security was valued at $37.81. Investor commission: 0.9%.
Finam.ru
The official website of Finam is similar to the official website of the exchange, indicating current quotes for oil, cryptocurrencies, and metals. A constantly updated news feed from the financial world speaks about the direction of development of the site and the course towards informatization. It’s convenient that clients are not only offered to open an account with real money, but also try their hand at a demo version with a total offered volume of $5 thousand.
For those who constantly monitor return on investment and work with stocks - the latest changes in securities prices of popular corporations and firms. In addition, you can read analytical materials, discuss on the site, take part in a training program or online conferences.
History of the holding
In the financial arena, Finam is almost 24 years old, and the development of the Finam holding begins with, which made a winning bet in its work by starting to publish the Investor's Portfolio newsletter. Since the calendar is in the 90s, and there are not so many quality media about finance and trading, the newsletter has become a window into the world of investments.
Many investors made decisions to cooperate or not with the company based on the information in the “Investor Portfolio”. Gradually, the investment business grew into the status of a broker and remarkably received licenses to operate. And a few years later the company received its current, well-known name.
Finam is a way of combining the words “Finance” and instead of the last letter S, replacing it with M, like the starting letter in the name of Moscow.
Compound
Today, the name of the Finam broker is associated with a financial holding company that operates in many financial areas in the country and abroad. Highlighting the basic structural divisions, I will focus on:
- Finam Bank is a commercial bank that provides typical services to its clients;
- training trains brokers and analysts in courses based on full-time and distance learning;
- Finam.ru is an online information and analytical platform;
- Finam. Logistics - a division specializing in the delivery of various goods;
- JSC Finam is a direct broker with permission to work in Russia.
Also in the main structure there is an investment fund (in some periods it was called the Finam Global investment fund). On the basis of the platform, not only the purchase and sale of assets takes place, but also trust management of various areas of investment takes place.
Holding licenses
I would like to note that you can trust the finance company because it always demonstrates its licenses, indicating that it is carrying out activities in the legislative field.
It is significant that the Central Bank of the Russian Federation was the first to issue a license to operate as a financial broker in 2016, immediately after the mandatory rule for brokers to obtain permits from the regulator came into force.
Highlighting the main licenses of the company, I will focus on:
- Finam Forex has been an official forex dealer since 2015.
- Bank Finam received a license in 2015 and works with national and foreign currencies.
- The manager works in securities, mutual funds, pension funds, but only of a private nature.
- Investment company Finam opens depository, brokerage and dealer activities for partners.
The presence of official documents directly affects the company's popularity among those who are still thinking about where to invest money.
US IT sector. FinEx MSCI USA Information Technology UCITS ETF (FXIT)
The fund invests in shares of large US companies in the US information technology sector. Focuses on the MSCI Daily TR Net USA Information Technology USD Index, which includes Apple, Microsoft, Facebook, Alphabet, Intel, Cosco, IBM, VISA, Oracle (92 components in total).
Over the course of a year, FinEx MSCI USA Information Technology UCITS rose in price by 16.57%, over three years – by 57.33%, over five years – by 116.33%. Since launch, the fund's shares have increased in price by 50.48%. At the beginning of October, one share was valued at $44.82. Investor commission: 0.90%.
German shares. FinEx MSCI Germany UCITS ETF (FXDE)
The fund invests in shares of large German companies: Sap, Siemens, BAYER, BASF, Allianz, Daimler, Adidas, BMW, Volkswagen, Deutsche Tekekom. Focuses on the MSCI Daily TR Net Germany USD Index (57 components in total).
I note that the index covers 85% of the German stock market. The fund is denominated in euros (additional protection against ruble devaluation).
Over the course of a year, the instrument grew by 4.73%, over five years – by 83.72%, over ten years – by 58.02%. At the beginning of October, one paper cost 25.77 euros. Investor commission is 0.90%. You can buy a “German” ETF on the MB through any Russian broker (the minimum purchase starts with one share).
Australian shares. FinEx MSCI Australia UCITS ETF (FXAU)
The fund is guided by the MSCI Daily TR Net Australia USD Index, which includes large mining companies and banks in Australia: National Australia Bank, BHP Billiton, Rio Tinto, CSL (72 components in total). Including the Australian in the portfolio provides good country diversification. The securities are denominated in US dollars.
Over the course of a year, the fund’s shares increased in price by 14.36%, over five years – by 25.12%, over ten years – by 61%. At the beginning of October, one piece of “Australian” FXAU is valued at $25.03. The investor commission is 0.90%.
UK shares. FinEx MSCI United Kingdom UCITS ETF (FXUK)
Focuses on the MSCI Daily TR Net United Kingdom GBP Index, which includes shares of Vodafone, HSBC, Shell, British American Tobacco (112 components in total). The fund is denominated in pounds sterling. Diversifies the portfolio both by country (UK) and by currency (pound sterling).
For a year, the return was 15.46%, for five years - 58.61%, for ten years - 67.67%. At the beginning of October, one share cost £21.12. Investor commission – 0.90%.
Comparison - which fund to choose
When choosing an ETF, you need to pay attention to the return and degree of risk. What matters is the amount the investor has. In terms of profitability, FXIT and FXGD performed well. But it is not necessary to buy shares of any one company or invest all funds in 1 ETF. It is best to create a portfolio of several funds. This will allow you to diversify your investments and minimize the degree of risk.
It is useful to distribute capital among funds in different countries. You can invest in the USA and Russia, Germany or China. A good option would be to buy the FXWO ETF - for shares of all major enterprises in the world. In this case, the investor simultaneously invests in all states, in different industries. Even if the financial situation in one country or industry worsens, others will provide capital gains. This will help not only save money, but also increase it.
Japanese shares. FinEx MSCI Japan UCITS ETF (FXJP)
Focuses on the underlying MSCI Daily TR Net Japan Index, which includes shares of Mitsubishi, Hitachi, Toyota, Honda, Canon, Sony (319 components in total). The fund is denominated in US dollars.
Over the course of a year, the index increased in price by 6.18%, over five years – by 46.05%, over ten years – by 10.16%. Dividends are reinvested in the underlying asset. In the fall of 2016, one share of FinEx MSCI Japan UCITS can be purchased for $31.32. Investor commission – 0.90%.
Chinese shares. FinEx MSCI China UCITS ETF (FXCN)
Already from the name of the fund it is clear that it invests in the Chinese market with a focus on the MSCI Daily TR Net China USD Index. The index includes shares of 148 largest Chinese companies: China Mobile, Bank of China, PetroChina, China Life Insurance and others. The units are denominated in US dollars.
Over the year, the index return was 5.82%, over five years – 51.68%, over ten years – 114.14%. At the beginning of October, one FinEx MSCI China UCITS security was valued at $31.87. Investor commission – 0.9%.
US bonds. FinEx Cash Equivalents UCITS ETF (FXMM)
The fund invests in short-term US Treasury bills (Treasury Bills). Securities are classified as “maximally reliable” (assigned an international credit rating of AAA).
It perfectly diversifies the portfolio by country (USA), instruments (bonds) and allows you to avoid banking risk. Investments in Treasury Bills are safer than investments in Russian bonds. The tool is convenient for managing funds when depositing for a period of one week or more. Provides high returns in rubles even for short periods.
The base index is the Solactive 1-3 month US T-Bill index (bonds with a maturity of 1-3 months). Ruble hedging provides additional income.
Since the beginning of the year, the fund’s return, taking into account ruble hedging, has been 6.14%, for one year – 8.27%, for two – 20.97%. At the beginning of October, one share of FinEx Cash Equivalents UCITS was valued at 1,274.06 rubles. The commission amount is 0.49%.
Calculation of yield on bonds buying stocks
For those who are interested in investing in Russia, you can calculate in advance which shares are the most profitable to buy using a special online calculator. To do this, you need to select the issuer, indicate the number of shares, the settlement date and the price (it will be slightly higher than the nominal price).
You can choose both Eurobonds (from 10 thousand dollars) and local ones, and in addition set your level - professional or light. The program for calculating the efficiency of Finama literally in a few seconds will carry out the calculation and show you the final profitability, return to offer in percentage or currency indicator (rubles or dollars).
RTS. FinEx Russian RTS Equity UCITS ETF (FXRL)
The fund invests in shares of Russian companies from the Moscow Exchange index (RTS index). The portfolio includes securities of Gazprom, Sberbank, LUKOIL, Magnit, Novatek, Rosneft, Surgutneftegaz, Norilsk Nickel, Tatneft, Moscow Exchange (MOEX) and other blue chips of Russia. The instrument is denominated in US dollars (USD).
I note that FinEx Russian RTS Equity UCITS (USD) is the only one in the line that showed losses in long-term dynamics. Over five years it fell in price by 23.62%, over 10 years - by 35.56%. True, over the past year it has slightly recovered its losses: +18.71%. FinEx analysts expect an average annual return of 16.3% over a 10-year horizon.
At the beginning of October, one part of the fund cost $27.52. ETFs can be placed in a personal investment account. The total commission is 0.9%.
Account for currency trading with Finam
There are 4 types of accounts available for our work; we work with each one only with licensed permission. When choosing investments on the Internet of JSC Finam, you need to open an individual investment account. If the main direction of work is Forex, then the corresponding account.
A demo account specially created for you to practice using virtual money. A single account is available to clients for whom Finam is a platform for comprehensive cooperation. When working with this account, there is a fixed commission - 3 cents for 10 shares on the American market or 0.01777% of the total turnover when working on the domestic market.
Transaq and Quik trading platforms
The Transaq service is designed for experienced traders and has 18 timeframe indicators and is not designed for round-the-clock operation, so it is more promising to speculate intraday. The Quik terminal is in many ways more accessible and understandable, in particular for those who have worked on services such as the freedom 24 platform and tried their hand at the foreign exchange markets. Since trading on the stock exchange is not tick, but real, it demonstrates the amount of money invested at the moment, and therefore is considered more authoritative. Trading platforms are designed for both experienced and newbies in the trading segment.
Why do I recommend FinEx ETF?
Three years is too short a period to confidently judge such an investment instrument as an ETF. It’s not just me who thinks so – there are a lot of similar reviews in investment-related LJ. But, in my opinion, FinEx ETF is one of the most interesting assets on the Russian market!
- Firstly, this is the only way to directly invest in popular international indices through any Russian broker. All problems associated with opening foreign accounts, taxes, high entry and language knowledge automatically disappear
- Secondly, buying any ETF from FinEx is affordable for everyone. The average purchase price for a share is $25-30, and the minimum purchase is limited to one piece
- Thirdly, compared to mutual funds, the commissions here are minimal!
- Fourth, investing in stock indices provides excellent portfolio diversification. By country: Russia, USA, UK, Japan, China, Germany and Australia. By currencies: ruble, dollar, euro, pound sterling. By instruments: stocks and bonds. By business area: from oil and gold to high technology
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