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BlackRock’s iShares to close MSCI Russia, eastern Europe funds due Ukraine
Global Banking & Finance Review®
Company
By Carolyn Cohn
LONDON (Reuters) -BlackRock’s iShares will close its MSCI Russia and MSCI Eastern Europe exchange-traded funds, BlackRock said on Friday, joining several other funds which have shut their doors because of the Ukraine conflict.
BlackRock had already suspended the funds in early March, shortly after Russia’s invasion of Ukraine, which Moscow calls a “special military operation”, on Feb 24.
“Due to Russia’s invasion of Ukraine, normal market trading conditions have remained materially impaired, and a significant portion of Russian securities are still not currently tradeable for non-Russian foreign investors,” BlackRock said in a statement.
BlackRock said it believed it was acting in the interests of shareholders by closing the funds.
BlackRock said Russian securities would remain in the funds “until such time as it is possible, practicable and appropriate, in the manager’s view, to liquidate each of the positions in an orderly and managed way”.
The MSCI Russia fund had $18 million under management and the MSCI Eastern Europe fund had $108 million, according to BlackRock data.
Two other BlackRock funds with Russia exposure remain suspended but have not closed, a BlackRock spokesperson said.
“With respect to any other fund, BlackRock will continue to make decisions on the future of suspended funds with significant exposure to Russia by taking into account the interests of investors, market conditions and the regulatory framework that applies to the funds,” the asset manager said in a separate statement.
A total of $6 billion in assets under management has been frozen in Russian or emerging market funds with Russia exposure since the invasion, Morningstar data shows.
Asset managers suspend funds to make sure customers are treated fairly and there is no stampede for the exits. But some funds are shutting for good due to the lack of liquidity caused by the conflict.
British fund manager Jupiter closed its emerging Europe fund earlier this month.
Danske https://www.danskeinvest.lu/articles/liquidation-of-danske-invest-russia-and-danske-invest-eastern-europe#:~:text=Due%20to%20the%20sanctions%20against,Invest%20SICAV%20Russia%20and%20Danske and Nordea https://www.nordeafunds.com/en/news/notice-to-the-unitholders-of-nordea-russia-fund closed Russia-exposed funds last month.
The BlackRock iShares funds are listed in London and other European exchanges.
IShares said in separate regulatory statements that it would delist the funds from the London Stock Exchange on or around June 22.
(Reporting by Carolyn Cohn, editing by Karin Strohecker, Philippa Fletcher and Chizu Nomiyama)
An exchange-traded fund (ETF) is a type of investment fund that is traded on stock exchanges, similar to stocks. ETFs hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism.
Asset management is the process of managing investments on behalf of clients, which can include individuals or institutions. It involves making investment decisions to grow the client's portfolio.
Market liquidity refers to the ease with which an asset can be bought or sold in the market without affecting its price. High liquidity means assets can be quickly sold at stable prices.
A shareholder is an individual or institution that owns shares in a company. Shareholders have a claim on the company's assets and earnings, and they may receive dividends.
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