Is your fund exposed to volatility in Russia?

ANYONE with investments in emerging market or Eastern European funds should look to see whether their holdings have big exposure to Russian companies.

The Russian stock market lost 35 per cent of its value in the wake of Putin’s decision to invade Ukraine and experts believe it will remain volatile.

For example, Jupiter Emerging European Opportunities fund had 61 per cent of its assets in Russia according to the latest fund factsheet.

Its shares fell by more than 20 per cent on Friday, although it is understood exposure to Russian equities has now been reduced.

Jupiter told The Mail on Sunday: ‘Jupiter portfolios are managed by experienced fund managers who have a deep and nuanced understanding of the markets in which they operate.

‘We are closely following the market situation and taking all appropriate action to protect the best interests of our investors.’

Fund Barings Emerging EMEA Opportunities has 28 per cent of its assets in Russia. Manager Matthias Siller says the escalation of the conflict will ‘place pressure on risky assets globally, not just Russia and Europe’.

The managers of Pictet Russian Equities and JP Morgan Russian Securities declined to speak to The Mail on Sunday.

Michael O’Brien, portfolio manager of investment trust Fundsmith Emerging Equities, says: ‘Russia’s economy is geared towards oil and gas and mining, typically cyclical, lowreturn businesses which do not fit our investment criteria. And never will.’

He adds: ‘Governance in companies operating in Russia is poor with a lack of transparency over who actually owns the assets and who are the major shareholders.’