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The Russian stock market has delivered the biggest returns to investors around the world this year. Global rate cuts and increased dividend payouts have been driving investor interest in Russia.

The MSCI Russia Index which tracks the 23 largest Russian publicly-listed companies has surged 44 percent since the start of the year, according to Sberbank analyst Cole Akeson.

That is almost four times the returns of the MSCI Emerging Markets Index which includes Russian stocks and companies listed in 23 other developing economies such as China, Brazil, Mexico and India, the analyst told business news outlet RBC.

Last year, the MSCI Russia Index grew by just 0.51 percent over the entire year amid fears of a US-China trade war and general poor performance globally for equities.The stock market's current surge has been driven by higher global risk appetite and a search for higher-paying assets amid interest rate cuts, said Mikhail Ganelin, senior analyst at Aton. He explained that it has benefited Russian stocks, which are seen as riskier and have lower levels of liquidity.

Russian companies increased their dividend payouts in 2019, which was one of the reasons of the MSCI index's growth. The dividend yield on the Russian market is among the highest in the world at 6.7 percent, compared to just two percent on the S&P 500.

Last week, the MOEX Russia Index set a new record high, passing 3,000 points for the first time in its history. The index comprised of shares of more than 50 major Russian companies, including Sberbank, Gazprom and Rosneft, has risen by more than 30 percent over the last 12 months.