OREANDA-NEWS. November 16, 2010. Standard & Poor’s Fund Services announced that it has assigned an A fund management rating to the Citadele Russian Equity Fund, the first Russian equities fund managed out of Latvia to receive an S&P fund management rating, reported the press-centre of Citadele.

Launched by Latvian investment management company Citadele Asset Management in March 2004, the fund invests in stocks that are domiciled in, or derive the majority of revenues from, Russia. It is benchmarked against the RTSI index, although this is only used for performance comparison and, given the 10% maximum stock weighting, the fund will be structurally underweight the largest index constituents.

Vitalij Sostak has been the portfolio manager on the fund since November 2008. This represents his first lead fund manager role but he does have some previous experience as a co-manager and as a securities broker. He makes good use of the wider investment team in generating investment themes, with the head of the portfolio management team, Edgars Makarovs, being influential. The group has recently increased the resources devoted to Russian equities through the addition of an analyst to assist Sostak.

“Sostak is afforded significant flexibility in managing the fund and, as a result, deviations at the stock and sector levels can be large. Cash is also used as a separate asset class and, in the recent extreme market conditions, was raised to the 20% level. Since taking over the portfolio, Sostak has seen some success against the peer group median and, given this and the adequate resources, the fund achieves an S&P Fund Services A (New) rating,” says Simon Dorricott, S&P Fund Analyst.

"We are honored to be the first company in Latvia to receive an S&P fund management rating. We appreciate the evaluation of our regional expertise and ability to provide quality fund management services. Going forward, co-operation with S&P Fund Services will help us to continue to deliver superior performance for our clients," comments Vitalij Sostak, of Citadele Asset Management.

The individual fund report can be downloaded from the Standard & Poor’s Fund Services website at www.fundsinsights.com.