DWS will shutter its suspended Russia ETF after MSCI announced plans to close the fund’s underlying index.
Final index calculations will run on 16 December for the Xtrackers MSCI Russia Capped Swap UCITS ETF (XMRD), and compulsory redemption will occur on 19 December before the fund is delisted the following day.
As of March 2022, the ETF’s total assets under management was £82 million.
In a statement, DWS warned that redemptions would be “zero or close to zero” owing to the fund’s valuation.
DWS said: “The index administrator has recently advised that the reference index will be discontinued as of 1 March 2023.
“In addition, the current derivatives invested in by the sub-fund are due to expire and the sub-fund will not be able to renew these derivatives due to applicable sanctions legislation.”
The fund will delist from the London Stock Exchange, Deutsche Boerse and Borsa Italiana on 20 December.
It was initially suspended on 1 March following Russia’s invasion of Ukraine. Yet, DWS opted to maintain the fund’s active status as it relied on a swaps-based exposure that replicated Russian stocks, creating a reference point for underlying valuations to be calculated.
Other Russian ETFs relied on global depository receipts. Invesco’s RDX UCITS ETF (RDCS) was shuttered in June after new Russian federal laws delisted depositary receipts representing shares of Russian companies from markets overseas.
BlackRock opted to convert its depository receipts into underlying shares.
Including XMRD, there are currently four Russia ETFs operating in Europe, including two offerings from Lyxor – the PEA Russia MSCI Russia IMIM Select GDR UCITS ETF (PRUS) and the Lyxor Russia UCITS ETF (RUS – as well as HSBC’s MSCI Russia Capped UCITS ETF (HRUD).
© 2022 funds europe
