Krasnodar, March 24 – Yug Times, Yelena Ivanova
Russia's Investment Boom: Bonds Surge as Stocks Lag in 2025
This Year's Stock Market to Reveal New Growth Drivers
Last year, 2025, set records for Russia's collective investment market: net inflows into retail mutual funds hit all-time highs. Experts insist this is not a short-term surge but the emergence of a sustainable structural trend. To discuss the development of the collective investment industry—and which instruments may take center stage this year—Yug Times spoke with Alexander Kaysin, Managing Director of Alfa-Capital Asset Management in Krasnodar.
Alexander, last year has been called "the year of bonds." Why did this segment dominate, and how did the year ultimately play out for investors?
To understand this, we need to look at where the debt market stood at the start of 2025. Yields had climbed to exceptionally high levels, which alone created a strong foundation for portfolio returns. The gap between market expectations and the actual decline in the key interest rate also worked in investors' favor. The market began pricing in a future cycle of monetary easing, so bonds benefited not only from coupon income but also from rising prices.
That said, performance within the bond market was uneven. High-grade securities—long-dated government bonds (OFZs), floaters (floating-rate notes), and money-market instruments—proved the most resilient. High-yield bonds, by contrast, saw risks accumulate, with a number of issuers defaulting.
The stock market, meanwhile, spent much of last year on an emotional rollercoaster. Trends were driven more by headline news than fundamentals, with investors reacting impulsively—particularly to developments in negotiation processes. By year's end, the MOEX Russia Index had effectively flatlined. As a result, equities entered 2026 with low valuations and mixed sectoral outlooks: domestic-demand companies look more promising, while exporters face greater challenges.
A Time for Tough Choices
Looking ahead to 2026, which asset classes, in your view, should take center stage in an investor's portfolio?
First, we need to understand the specific investor's goals, time horizon, and risk profile before selecting the right instruments. Stocks, for instance, still hold significant potential in our assessment and could deliver around 30% returns in a base-case scenario. This growth may come from dividends and a rebound in valuations to more reasonable levels. That said, stock selection will be critical. In this context, companies focused on domestic demand deserve attention. Businesses with high ruble-denominated debt are also worth considering: as the key rate declines, their debt servicing costs will fall, directly boosting profits and dividend potential.
Bonds remain relevant as well. Right now, they allow investors to lock in high yields for the long term, particularly in the high-quality credit segment.
Markets are likely to stay volatile throughout this year. News flow and key rate decisions will continue to impact both equities and fixed income. So there's no one-size-fits-all solution. Investors must conduct thorough due diligence on issuers, assessing their debt burdens and cash flow stability. In this environment, professional asset management becomes even more valuable.
Could we say that this explains last year's record inflows into the collective investment market? How sustainable is this trend?
When markets move sharply and unpredictably, individual investors struggle to assess the risks and prospects of specific issuers on their own. That's where funds come in—they offer professional management and diversification, making them especially appealing in turbulent times.
By the end of 2025, retail mutual funds saw record inflows, with the number of unique unitholders exceeding 13 million. We witnessed a genuine boom in the fund industry. This isn't just a one-off surge; it's a long-term shift in collective investing, driven by several factors. These include the technological advancement of investment infrastructure and distribution, evolving regulations, greater market transparency, and the growing culture of long-term savings. As investor trust strengthens, funds are becoming a cornerstone of financial planning. The result? Steady, structural demand for collective investment vehicles—not just situational interest.
A Market Still in Its Early Stages
Is there further growth potential for collective investments?
We see significant potential. For comparison: in China, the volume of retail funds is equivalent to 22% of GDP, while in Russia, this figure remains below 1%. That means our market is still in its early stages of development. It can grow not only by attracting new clients but also through improvements in product quality. The more precisely asset managers account for investors' risk tolerance, investment horizons, and goals, the more sustainable the market's growth will be. Personalized strategies, an expanded range of funds, and greater transparency in management should all contribute to this.
How well do funds currently align with today's market agenda? Are managers keeping pace with shifting trends?
Funds allow investors to choose solutions tailored to different market scenarios. There are conservative instruments, such as bonds and money market funds, as well as more volatile options like equities and alternative assets. This makes funds a versatile tool.
A case in point is precious metals. Growing interest in gold, silver, platinum, and palladium began taking shape last year, and by January 2026, we saw a pronounced surge. This was reflected in the collective investment market as well. In January alone, net inflows into precious metals funds exceeded 6 billion rubles—a record high in the history of observations.
Through funds, investors can quickly and conveniently tap into current market trends, often more easily than by purchasing assets directly. For example, investing in physical gold comes with high entry barriers, storage costs, and bid-ask spreads. Funds provide exposure to metals without these infrastructure-related expenses.
We believe interest in precious metals will persist this year, as geopolitical uncertainty, currency risks, and demand from central banks remain key supporting factors. That is why precious metals still have a place in portfolios in 2026 as a diversification tool.
