If your clients are looking to invest in emerging markets, they may want to turn their attentions to Russia.

While the country had a public debt-to-GDP ratio of 100% a decade ago, it now sits around 10%, the lowest level of all emerging markets.

Read: Building your portfolio one BRIC at a time

It’s also surpassed the U.K. as Europe’s most important consumer market, says Stephen Burrows, senior investment manager and product specialist of Global Emerging Markets Equities at Pictet Asset Management. His firm manages the Renaissance Emerging Markets Fund.

The risks? The country is hugely dependent on oil and has a small domestic investor base.

“The stock market is quite volatile in times of global market stress. So, if foreign investors get nervous because of problems in the Eurozone, Russia tends to underperform,” says Burrows.

Read: Eye on emerging markets

He adds, “If oil starts to move downward, investors also get concerned about that vulnerability. But, with oil prices the way they are now, it’s still reasonably positive for the Russian markets.”

So, even with these hassle factors, he’s confident Russia merits investor interest, as sentiment toward Russian equities—once seen as risky—has shifted significantly.

“From a stock market perspective, it is the cheapest market in our universe. It currently has a price earnings ratio of 4.5 times. It’s one of only two markets that is trading below book value. The other is Hungary,” says Burrows.

And while investors are concerned about corporate governance in Russia, there’s been some early signs of improvement.

“We’ve seen several increases in dividend payments across Russia over the past few months. We’ve also seen a number of share buybacks being announced for the first time.”

Read: In search of the next BRICs

He adds, “The level of transparency has been improving and one of the best ways to show that is the dividend payout ratio. In Russia, it’s very low, averaging around 11%; the average for emerging markets is around 28%.”

Its companies are starting to recognize the needs of minority shareholders, and offering them better dividend payouts.

Read: Beyond the BRICs, for more from Stephen Burrows

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