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Oleg Biryulyov, manager of the JPMorgan Russian Securities trust, explained: “Despite volatility, Russia proved to be a relatively safe haven when the majority of other global financial markets were in turmoil.

“Our investment strategy of being overweight in materials and consumer-related themes at the expense of the energy sector, continued to be the right combination. However, it is now evident that such a strategy is becoming riskier as divergence in performance of these sectors is getting wider,” she added.

The firm said that despite rapid appreciation, the mining and steel sector still offered value for investors. Prices for coal, iron ore and steel are based on real supply and demand balances and are not conducive to financial speculation, Mr Biryulyov said.

Furthermore, infrastructure spending in Russia is about to undergo a massive state-led wave of investment, which is expected to be followed by the private sector. The manager said she would be positioning the portfolio to take advantage of these economic trends.

Over the six months to 30 April 2008, the company’s net asset value and share price both produced positive returns, although the manager said the increases were small in comparison with last year’s outstanding results.

The net asset value rose by 3.2 per cent outperforming the MSCI Russian 10/40 Equities Indices index, which returned 2.5 per cent. The discount at which the ordinary shares traded to the net asset value narrowed over the period, resulting in a share price total return of 5 per cent.