HSBC Asset Management is set to close its Russia equity ETF exactly one year after the war in Ukraine began.
In a shareholder notice, the asset manager said it would be shutting the $67.4m HSBC MSCI Russia Capped UCITS ETF (HRUD) after MSCI announced it would discontinue the index calculation on 1 March.
It comes just two weeks after Amundi said it would be terminating the Lyxor MSCI Russia UCITS ETF (RUS) which also tracks the MSCI Russia Capped index.
The FinEx Russian RTS Equity UCITS ETF (FXRL) is the last remaining Russia ETF in Europe, listed on the Moscow Exchange.
As a result, the ETF will delist from the London Stock Exchange, Deutsche Boerse, Six Swiss and Borsa Italiana.
ETFs a year on from Russia’s invasion of Ukraine
In addition to the closure of the index, HSBC AM said it decided to close the ETF given the adverse changes affecting the fund and Russia’s ongoing invasion of Ukraine.
“The directors have determined that it is no longer practical nor advisable for the fund to continue to exist,” the firm added.
“Consequently, in accordance with the articles of association the directors have determined it is now appropriate to redeem all of the shares and to terminate the fund on the closure date.”
However, as Russian securities cannot currently be sold HSBC AM said there is not likely to be any distribution to shareholders on the closure date.
“In the event that it is possible to sell and realise any value from the fund's investments at a future date, the proceeds arising from the sale shall be paid to shareholders on a pro-rata basis in accordance with each shareholder's relevant holding in the fund,” the UK giant said.
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.
Last December, DWS also terminated its Russia ETF after MSCI axed the index, following in the footsteps of BlackRock and Invesco.