Investors run into problems buying the dip on Russian stocks and ETFs – The Average Joe

    Investors run into problems buying the dip on Russian stocks and ETFs

    Victor Lei — Head of Research

    March 8, 2022


    March 8, 2022

    Those who bought the initial dip in Russian stocks are now finding them hard to sell — even impossible in many cases.

    What’s the big deal? Russian stock markets have been shut down for over a week now — and Russian stocks and ETFs trading on global exchanges have dropped off a cliff since the invasion began.

    Most Russian ETFs trading on North American exchanges have been frozen or delisted — some funds even starting to shut down. Here’s what it means for investors…

    • Investors will have to wait until trading is resumed to sell — per COO of HANetf (via FT).
    • If an ETF or fund liquidates and shuts down, investors get back whatever cash is left — which could mean large losses.

    Those holding Russian assets may be forced to sell at very low prices — if it’s even possible — or risk them going to zero as per Cristian Maggio of TD Securities (via FT),

    Pros got caught too: Even large investment funds are facing steep losses from buying the initial dip.

    State governors have called on pension funds to sell all Russian holdings — which make up a small portion of their portfolio — i.e. California’s pension fund, Calpers, has less than 0.2%.

    Nuclear war: In a research note, BCA Research assigned a 10% chance on a nuclear war in the next 12 months:

    • Putin is committed to a regime change in Kyiv — and anything less would be defeat.
    • “If Putin concludes that he has no future, the risk is that he will decide that no one else should have a future either”.

    Hedge fund manager, Bill Ackman, warned (via CNBC) World War III has “likely already started” — but there’s still much more we can do before it escalates.

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