Russia was one of the best trades of 2016 by a country mile. A strengthening ruble supercharged foreign interest in domestic Russian government bonds, pushing yields down to around 8 percent from 12 percent in mid-2015. Contrary to appearances, there's still some room to run.
There's a realistic chance that inflation will cool to the Russian central bank's 4 percent target. That equates to an inflation-adjusted real return of about 4 percent for holding Russian debt -- a rare sight for most bond markets.
