iShares has capped new share creation in its $308 million Russia ETF, making it one of the first fund managers to put restrictions on its vehicle covering the increasingly sanctioned country.
In a notice Tuesday morning, the largest ETF issuer in the world said it’s halting the creation of new shares in the iShares MSCI Russia ETF (ERUS) until further notice in response to heavy sanctions that the U.S. and Western governments have levied on Russia since its invasion of Ukraine last week.
The fund’s 14 million shares outstanding can continue to trade as of 10:30 a.m. Eastern Time Tuesday, where it has fallen 13.81% to $15.53 per share.
ETFs focused on Russia have been crushed under the wave of sanctions meant to punish the country’s invasion of Ukraine, ranging from outright bans on trading Russia’s sovereign debt to the NYSE and Nasdaq exchanges halting trading of a handful of Russian-domiciled firms on Tuesday.
A senior executive at index provider MSCI said on Monday that Russian stocks are “uninvestable” and liable for removal from the firm’s indexes, while the bond index provider ICE said it would remove sanctioned Russian debt from its indices in its rebalancing at the end of the month.
Share prices for ERUS and the VanEck Russia ETF (RSX) have both fallen by more than 50% in the past five trading periods.
Contact Dan Mika at [email protected], and follow him on Twitter
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