Research Shows Four-Fifths Of EM Funds Are Still Invested In Russian Stocks

According to Copley Fund Research, fewer than a fifth of actively managed developing market equities funds have reduced their exposure to Russian companies to zero, with a handful of funds unwilling to sell completely.

After Western nations implemented sweeping sanctions to punish Moscow for its Feb. 24 invasion of Ukraine, Russia has been cut off from global financial markets, and its stocks and bonds have been removed from indexes.

Sanctions, combined with Russian retaliatory measures such as money controls, have rendered the country’s financial markets largely inaccessible to international investors.

According to the Copley research, 45 funds closed out of all Russia positions between end-2021 and end-April, encompassing 253 funds with $450 billion in assets under management.

“Many funds are holding positions that they can’t get out of so will remain invested for a while,” said Steven Holden at Copley.

Russia now accounts for less than 2% of average fund weightings, down from 4.5 per cent in January.

According to Holden, Russia’s present weighting is artificially high since assessments for some stocks, such as Sberbank, are still based on last trade prices from before the war.

“Russia is falling down the ranks and will drift into insignificance over the course of the year,” he added.

Emerging market asset managers have a large position in Russian stocks, notably after the Moscow Exchange issued a dollar-denominated index in 1995.

Morgan Stanley, Lazard Asset Management, Templeton, and Van Eck funds are among the investment vehicles that have completely fled Russia, according to the data.

(Adapted from

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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