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Asian funds with exposure to Russia hit by Moscow’s invasion of Ukraine, 92 per cent post losses

  • Among 52 equity funds that are available for sale in Asia and have Russian investments, 48 have incurred losses this year: Morningstar
  • Funds run by the likes of BlackRock and UBS have lost at least 52 per cent of their values this year

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An exchange office in Moscow. Russia has ordered the suspension of trading on its stock exchange amid an array of sanctions by western countries. This has prevented fund managers from pulling out of the Russian stocks to mitigate the risks from its invasion of Ukraine. Photo: EPA-EFE
Zhang Shidong

Russia has left Asian money managers with exposure to the resource-rich country grappling with what to do with their stock portfolios.

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Among the 52 equity funds that are available for sale in Asia and have Russian investments, 48 have incurred losses this year, according to data by research firm Morningstar. Funds run by big-name money managers BlackRock and UBS have not been spared the turmoil either – losing at least 52 per cent of their values and numbering among the worst performers – the data shows.

The most pressing issue facing the fund managers is that they are unable to pull out of the stocks to mitigate the risks from Russia’s invasion of Ukraine, with Moscow ordering the suspension of trading on its stock exchange amid an array of sanctions by western countries. Russia’s benchmark Moex index had lost a third of its value through February 25 this year.

While it is not clear when the trading halt will end, one thing is certain that Asian funds with Russia exposure will suffer another bout of dramatic declines in net asset values on resumption to mirror the debacle that Russian companies trading overseas face.

The BlackRock Emerging Europe Fund, with US$294 million in assets under management, has delivered a 59 per cent loss in 2022. Photo: Reuters
The BlackRock Emerging Europe Fund, with US$294 million in assets under management, has delivered a 59 per cent loss in 2022. Photo: Reuters
Rusal, the aluminium maker trading in Hong Kong, for instance, has plunged 42 per cent since the war started on February 24, while the London-traded shares of Sberbank, Russia’s largest lender, lost 99 per cent of their value in the week of March 4 before trading was halted.
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