Investors in BlackRock’s defunct Russia ETF have received their first redemptions from the fund over 15 months after the firm shut the ETF.
The world’s largest asset manager said conditions allowed the sale of a “limited number of securities” held by its iShares MSCI Russia ADR/GDR UCITS ETF (CSRU) in August, with proceeds distributed to investors.
BlackRock announced the termination of the ETF in May last year, alongside the iShares MSCI Eastern Europe Capped UCITS ETF (IEER), following Russia’s invasion of Ukraine.
The group said at the time it would not sell the securities until it was “possible, practical and appropriate” to liquidate each position in a bid to “protect the value of the funds”.
“Conditions have allowed the sale of a limited number of securities held by iShares MSCI Russia ADR/GDR UCITS ETF,” BlackRock said in an update.
“As and if market conditions and legal and regulatory restrictions allow, BlackRock will seek to implement an orderly disposal of further Russian securities in line with our fiduciary duties and respective fund investment objectives and policies in order to return any residual net proceeds to investors.”
BlackRock did not disclose the conditions that allowed it to sell the securities but said it would assess the situation based on multiple factors including legal restrictions, liquidity, spreads, international investor access, volume and volatility.
The group would also not disclose which assets were sold and the value at which they were sold.
After it terminated the ETF, BlackRock initially said it would not exercise its right to convert its global depository receipts (GDRs) purchased before April 27 into underlying shares before reversing the decision and keeping the shares on the funds register.
Converting GDRs can also be expensive. Last year, VanEck put pressure on banks to waive the fees on its depository receipts of Russian companies which it said was “significantly eroding its assets”.