Industry Updates

Amundi closes Russia ETF as MSCI calls time on index

The MSCI index will cease to exist from 1 March

Theo Andrew

a red and white ball in a net

Amundi has shut its last remaining Russia equity ETF after MSCI said it would discontinue index calculation on 1 March.

In a shareholder notice, Amundi said the Lyxor MSCI Russia UCITS ETF (RUS) will enter liquidation on 15 February after a portion of the global depositary receipts (GDR) in the index are set to be cancelled.

International sanctions and Russian federal law prohibiting local issuers from having their shares traded outside of Russia created “unforeseeable uncertainties” for the ETF, Amundi said.

Following the liquidation, RUS will be delisted from the London Stock Exchange, Euronext Paris, Borsa Italiana, Six Swiss and Deutsche Boerse

“Based on the above, the ETF’s ability to achieve its investment objective – replicating the upward and downward evolution of an index of Russian GDR – is materially impaired,” the notice said.

“After having explored all possible solutions, the board of directors has decided that it is in the best interests of the shareholders to terminate the ETF.

“Furthermore, MSCI, the index sponsor, will discontinue index calculation and dissemination on 1 March.”

The French asset manager’s other Russia ETF, the Lyxor PEA Russia MSCI Russia IMI Select GDR UCITS ETF (PRUS), has also been delisted.

Amundi said the ETFs over-the-counter (OTC) swap transaction will be unwound as soon as possible with the shares cancelled as soon as the swap termination is completed.

It added the prices and the timeframe for completing the process will be “uncertain and might not be as competitive as pre-crisis levels”.

“The board of directors however anticipates that this process has no certainty and may take an indefinite amount of time,” the French asset manager said.

“There is no guarantee that the counterparty to the OTC swap transaction will succeed in realising all the underlying of the OTC swap transaction and/or generate any value in doing so. In the worst case, investors may not receive any proceeds following the termination of the sub-fund.”

All Russia-focused ETFs were suspended in early March 2022 after Russia launched a full-scale invasion of Ukraine. The Moscow Stock Exchange closed on 25 February and foreign investors were banned from selling their investments.

The latest delisting means the only remaining Russia ETF in the market is the HSBC MSCI Russia Capped UCITS ETF (HRUD), which physically replicates a basket of Russian equities.

Last December, DWS also terminated its Russia ETF after MSCI axed the index, following in the footsteps of BlackRock and Invesco.

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