How to tell if you're invested in Russian companies

Russia faces escalating sanctions that have implications for investments

Carrie Pallardy

By 

Carrie Pallardy

Carrie Pallardy

Contributing Reporter

Carrie Pallardy is a contributing reporter at Policygenius, where she covers insurance and personal finance news. Her work has also appeared in the Chicago Tribune and Saving For College.

Published March 9, 2022 | 2 min read

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The ongoing Russia-Ukraine war has global implications. For both ethical and financial reasons, investors may be interested in knowing whether they have money invested in Russian companies. How can you evaluate your investments for exposure to Russian stocks, and what could the current conflict mean for your portfolio?

How do you evaluate your investments?

If you have most of your investments in index funds, you may not know exactly where your dollars are invested. Elliott Appel, a certified financial planner and founder of Kindness Financial Planning, recommends downloading holding lists from the fund companies to get a handle on where your money is invested. Googling the fund’s ticker symbol and “holdings” should get you a list. From there, you may be able to filter holdings lists by location. You can also look for individual Russian companies.

How are sanctions affecting Russian investments?

As the Russia-Ukraine conflict continues, Russia faces escalating sanctions that have implications for investments. 

“With an index fund, you can't get rid of specific holdings, but given the sanctions, many index fund providers are marking their holdings in Russia as having no value,” Appel says. “For example, MSCI Inc. and FTSE Russell are removing Russian securities from their indexes as they see them as ‘uninvestable.’” [1]

The Russian stock market is currently closed, which makes it complicated to remove Russian stocks. [2] Once it reopens, expect to take heavy losses on Russian stocks, since many have fallen to pennies a share.

“For the most part, it's looking like it's going to mean taking a total or nearly total loss on Russian investments. The caveat would be if Russia opens their stock market soon and investments don't continue plunging in value,” says Appel. 

What can investors do?

There is not much investors can do if they have money invested in Russian companies through an index fund. Funds are largely pricing Russian securities near zero.

“Even people who are holding Russian securities can't really sell them now,” says Appel.

What does this mean for the future?

Removing Russian investments from your portfolio, when possible, means you eliminate exposure to Russian companies and their profits and losses, according to Appel. 

“Once the stock market opens, the funds that own Russian stocks will need to sell them if they have been removed from the index, such as in the case of funds that track MSCI, S&P, and FTSE Russell indexes,” he says.

The outlook on the future remains very uncertain. The war and resultant financial sanctions are likely to have a long-lasting impact, but how exactly the consequences will look in the investment landscape remains to be seen.

“We've seen Greek and Egyptian stock markets close in the past, and they plummeted at first when reopening, but then resumed trading again. It's anybody's guess how this plays out with the Russian stock market,” says Appel.

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