HSBC AM and FinEx halt Russian ETF creations

Tracks the moves of BlackRock, Invesco and DWS

HSBC Asset Management and FinEx Capital have become the latest issuers to suspend primary market trading of their Russian ETFs.

Effective March 2, HSBC AM announced that it will suspend the issuance and redemption of shares of the HSBC MSCI Russia Capped UCITS ETF (HRUB) as the Moscow Stock Exchange remains closed.

Additionally, FinEx announced that it would take the same action on its FinEx Tradable Russian Corporate Bond UCITS ETF (FXRU).

Both ETFs will also have their net asset value (NAV) suspended while trading continues on the secondary market. HRUB is currently trading at a 6.3% discount to its net asset value.

HSBC AM said the decision was made due to the escalating conflict in Ukraine and the impact of Western sanctions on the Russian economy, severely affecting liquidity in the country’s stock market.

In a market announcement, he said: “The decision to impose the suspension has been made in the best interests of shareholders due to events beyond the control, responsibility and power of the directors which do not allow the disposal and valuation of investments for the time being. be included in the fund without harming the interests of the shareholders.

FinEx added that the board made the decision because of the ETFs’ exposure to Russian corporate bonds, Russian ruble and Russian ruble foreign exchange contracts.

Prior to its suspension, HRUB had already experienced two days without trading earlier this week, allowing the publication of its net asset value while suspending trading in the primary markets.

BlackRock, Invesco and DWS announced they would suspend primary trading on their standalone Russian ETFs while the former added that it would take the same action on its iShares MSCI Eastern Europe Capped UCITS (IEER) ETF.

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