Sberbank Targets $500 Million for Its Russian Consumer Index

OAO Sberbank seeks to attract as much as $500 million into a new index showcasing the performance of consumer companies over commodity producers in Russia, the world’s biggest oil and gas exporter.

The Sberbank CIB Ivanov index of 24 stocks will be priced daily and rebalanced quarterly, the state-run bank said today. Its global markets team will trade the index.

“We’re hoping for significant interest from exchange traded funds,” Ovanes Oganisian, a strategist at Sberbank Investment Research, told reporters today in Moscow. “We could see $200 million to $500 million inflows in the first year.”

Russia is set to overtake Germany as Europe’s biggest consumer market and become the world’s fourth-largest by volume by 2020, according to Andy Smith, the bank’s head of equity research. Investors are overlooking consumer companies because two-thirds of the market is made up of commodity stocks, he said at the briefing.

Sberbank, Russia’s biggest lender, food retailer OAO Magnit and potash producer OAO Uralkali are tied for the largest weighting in the index. Sberbank has climbed 16 percent this year, while Magnit has surged 20 percent. Uralkali gained 0.1 percent. The 50-stock Micex Index, Russia’s biggest, has risen 4.3 percent.

The Ivanov Index returned more than 300 percent when back-tested over the past decade compared with 267 percent for a benchmark, according to the statement.