JP Morgan Asset Management (JPMAM) and Liontrust have suspended their Russia-linked funds with immediate effect, spokespeople confirmed to Portfolio Adviser.
The affected strategies are:
- – JPMorgan Funds – Russia Equity Fund (Sicav)
- – JPMorgan Funds – Emerging Europe Equity Fund (Sicav)
- – JPM Emerging Europe Equity Fund (Oeic)
- – Liontrust Russia Fund
JPMAM and Liontrust are not the only managers with funds directly and indirectly linked to Russia. Others include iShares, HSBC and Pictet.
A spokesperson for Blackrock told Portfolio Adviser that the company is “monitoring” the guidelines issued by regulators. “We are taking all necessary actions to ensure compliance with applicable sanctions laws and regulations, including those of the US, UK and EU.”
Temporary ban on foreign investors selling local securities
The JPMAM spokesperson said: “We are closely monitoring the risks and remain focused on acting in the best interest of our clients and shareholders, at all times, as part of our fiduciary duty.”
A spokesperson for Liontrust said the company “had not taken this action lightly” but believed it “is in the best interests of all investors given the events of the past few days”.
“These events include [Monday’s] closure of the Moscow Stock Exchange and the temporary ban on foreign investors selling local Russian securities.”
Neither firm was able to provide any guidance on how long the suspensions will last, and both said the situation would be under constant review.
The market reaction to the invasion saw sharp drops across the funds, with Liontrust taking an especially hard hit when compared with the benchmark IA Specialist sector.
| 3m | 6m | 1y | 3y | 5y | |
| JPM Emerging Europe Equity | -38.4 | -39.7 | -28.8 | -21.6 | -20.0 |
| JPM Russia | -41.5 | -40.1 | -29.5 | -15.2 | -10.1 |
| Liontrust Russia | -46.6 | -44.3 | -33.2 | -22.2 | -2.6 |
| IA Specialist | -6.2 | -5.1 | 2.3 | 17.4 | 23.7 |
Unable to buy, switch or sell
In a separate letter to shareholders of the JPMAM Oiec, authorised corporate director Andrew Lewis wrote: “Due to the escalating conflict between Russia and Ukraine, local market trading conditions are not currently operating as they normally would do and accordingly, we are unable to manage the fund in accordance with the investment objective and policy.”
Dealing in the £30.18m fund was suspended at midday on 28 February, with the company unable to accept any instructions to buy, switch or sell after that point.
While it will not be possible to place trades, clients will continue to receive “applicable income payments, statements and other updates”, Lewis wrote.
Portfolio Adviser has reached out to Pictet and HSBC to request updates about the status of their respective strategies.
