- Numerous fund managers have suspended Russia-focused funds since Russia invaded Ukraine last week, according to reports.
- JPMorgan, BNP Paribas and others have frozen withdrawals from those funds after Western sanctions.
- Western powers have imposed crippling sanctions on Russia following its invasion of Ukraine.
Some of the world's biggest asset managers have frozen withdrawals from their Russia-focussed funds after the country's attack on Ukraine unleashed a raft of punitive sanctions that have sent the currency into freefall and forced the closure of the stock market.
Big fund managers including JPMorgan, Amundi, and BNP Paribas have frozen Russian-linked assets worth at least $3 billion as the West stepped up its sanctions against the country, according to various media reports.
Fitch Ratings on Monday said at least 10 Russia-focused funds with assets worth around $4 million had been suspended, but the number rose as more firms halted Moscow's access to the international financial markets.
Reuters and Bloomberg identified more than a dozen suspended Russia-focused funds, and the FT said at least 19 asset managers had frozen withdrawals from funds since the start of the invasion last week.
Unprecedented Western sanctions against Russia, including a ban on some of the country's banks from the SWIFT international payments system and freezing the Russian central bank's access to almost all of its $630 billion in foreign reserves, have locked it out of the global financial system. Anyone holding Russian stocks, bonds or currency have found it virtually impossible to trade.
"The closure of the Russian stock exchange, for example, could force funds with domestic exposure to suspend redemptions due to an inability to trade effectively," Fitch said.
The Russian stock market was closed for a third day on Wednesday and exchanges like the NYSE halted trading in local-listed shares of Russian companies. London-listed shares in some of Russia's biggest companies were virtually worthless by Wednesday.
"Due to the serious dysfunctioning of the Russian securities markets, normal market trading conditions cannot be guaranteed," Amundi said in a statement as reported by Bloomberg. Amundi has also suspended its Russian-linked funds, many of which would have racked up huge losses.
The VanEck Russia exchange-traded fund - one of the world's largest ETFs with exposure to the country - has lost around 50% in value in just three trading days, reflecting the extent of the meltdown in Russian assets.
With the likes of BP, Shell and Norway's Equinor abandoning their Russian oil and gas projects despite incurring billions of dollars in losses, Russia has in turn banned foreign companies from exiting their investments and stepped up its defense of its economy, adding to difficulties for foreign investors.
Almost $13 billion in Russian stocks owned by US.] and Europe-based funds are now in sanctioned companies, Bloomberg said. Overseas investors owned about $86 billion of Russian equities in 2021, according to data from the Moscow Exchange cited by Bloomberg.