Industry Updates

Index providers take action on Russia exposures

Qontigo, MVIS, ICE and Weiner Boerse announce suspensions, exclusions and terminations

Jamie Gordon

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Index providers including Qontigo, MVIS, ICE and Weiner Boerse have either frozen their Russia benchmarks or deleted Russian securities from their indices following invasion of Ukraine last Thursday and subsequent sanctions that have rocked the Russian economy.

Qontigo announced one of the more swathing packages of deletions, with exclusions carried out across its STOXX and DAX index ranges.

Effective 18 March, STOXX will suspend all six denominations of the STOXX Russia Total Market index.

The STOXX Russia universe is not eligible with immediate effect to any STOXX, iSTOXX or customised indices and any securities identified as sanctioned by the European Union, UK or US will be deleted. The STOXX Russia Universe captures the performance of 61 stocks.

The index provider will also hold a consultation with clients to determine a timeline to suspend and terminate its DAX Global Russia and DAX Global Russia+ indices. 

Russian securities will also be removed from the DAXglobal Gold Miners index, DAXglobal agribusiness index and DAXglobal BRIC index with immediate effect. 

These decisions followed what STOXX described as “exceptional market conditions” which include restrictions on capital flows and market disruption affecting the aggregated liquidity, capitalisation and tradability of Russia securities.

Elsewhere, VanEck’s indexing arm MVIS said it will freeze the MVIS Russia index and MVIS Russia Small-Cap index, with reviews and rebalances also suspended until the next regular review.

MVIS added Russia stocks will be considered ineligible for inclusion to any index during its Q1 2022 review.

Russian securities can also be deleted based on liquidity and trading, with these exclusions taking place at a price of zero.

Also joining the trend was ICE Data Indices, which announced it will exclude new bonds from issuers sanctioned by the US, UK or EU from its fixed income benchmarks, effective 28 February.

This includes sovereign debt from the Russian central bank, National Wealth Fund or the Ministry of Finance.

The debt of sanctioned issuers will be removed from ICE indices on rebalancing day on 31 March.

Finally, the Weiner Boerse – which owns the Vienna Stock Exchange and its CEE & CIS indices – will suspend all indices containing Russian receipts. This will affect the Invesco RDX UCITS ETF (RDXS), which will suspend trading effective 2 March.

These developments follow moves by other index providers including JP Morgan, which looks set to delete Russian issuance from two emerging markets ESG indices and MSCI earmarking blanket removal of Russia securities from its products as a “potential next step”.

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