5. Dezember 2023

VanEck Suspends Two Russia ETFs Due to Sanctions-induced Inactivity

• Investment firm VanEck recently suspended two Russia ETFs due to inactivity as a result of Western sanctions.
• VanEck is liquidating its Russia exchange-traded funds (ETFs) due to a lack of Western investment interest.
• The ongoing Western sanctions against Russia prevent major stocks, such as Gazprom, from trading in the West, resulting in liquidity issues for the funds.

Investment firm VanEck recently made a difficult decision to suspend two Russia exchange-traded funds (ETFs), citing a lack of Western investment interest caused by the current geopolitical strain between Russia and Ukraine. The ongoing Western sanctions against Russia have effectively dried up any prospect of investment in the country, making it impossible to manage the funds consistent with their investment objectives.

Since the Russian-Ukraine strife began, US investment in Russia has come to a halt. Additionally, the sanctions targeting the country’s major stocks, including Gazprom, have resulted in a ban on trading in the West. This has caused liquidity issues for the funds, as VanEck finds itself unable to buy, sell, and take or make delivery of Russian securities.

The news of the suspension of these two Russia ETFs is a major blow to VanEck, and the asset manager is now looking for alternatives to manage its funds and maximize their potential. While the company has not yet found a viable solution, it is actively searching for ways to invest in Russia while avoiding the risk of running into any Western sanctions.

VanEck is not the only firm affected by the sanctions against Russia. Other investment firms that have traditionally invested in Russian equities are also finding it increasingly difficult to make money in the country. This has forced many firms to look for alternative investments, such as bonds, commodities, and other asset classes outside of Russia.

The Western sanctions have had a devastating impact on the Russian economy, with the Russian stock market temporarily closing and investments in the country taking a significant hit. However, despite the current difficulties, VanEck is still hopeful that the situation will improve and is continuing to search for ways to invest in Russia without running into any legal issues.