The following message reflects fund-related developments and the state of the Russian market as of April 13, 2022.
Q: How are funds exposed to Russia managed?
A: VanEck continues to manage all funds as a fiduciary, in a manner that is in the best interests of our shareholders. We are constantly assessing current market conditions and monitoring new developments and will take actions which we believe will best enable us to manage the funds.
Q: What is the current exposure to Russia in my fund?
A: VanEck fund holdings can be viewed on each fund’s web page at vaneck.com. ETF holdings are updated daily and show the number of shares held and current market values. Mutual fund holdings are updated at the end of each month.
Q: Have Russian stocks been removed from the indices tracked by my ETF?
A: ICE Data Indices and JP Morgan have removed Russian fixed income securities from the international and emerging markets bond indices tracked by VanEck ETFs.1 Index providers have also removed Russian securities from equity indices, with the exception of indices tracked by the VanEck Russia ETF (RSX) and VanEck Russia Small Cap ETF (RSXJ), which have been frozen by the index provider, MV Index Solutions (“MVIS”). Please visit www.mvis-indices.com for the latest index announcements from MVIS.
Q: Are Russian securities tradable?
A: The liquidity of Russian securities remains extremely limited and foreigners continue to be prevented from trading in the local Russian market. No announcement was made by the Moscow Stock Exchange regarding future plans to reopen trading for non-Russian investors. Also, certificates of deposit have generally ceased to be traded.
Q: How are Russian titles rated?
A: Securities are priced in accordance with the fund’s pricing policy, which is described in each fund prospectus. The net asset value of a fund may reflect the fair value of certain portfolio securities rather than their closing price on the stock exchanges on which they are primarily traded.
The daily value of our ETF portfolios can be viewed on each fund’s web page at vaneck.com.
Q: What is the current status of the VanEck Russia ETF (RSX) and the VanEck Russia Small Cap ETF (RSXJ)?
A: The creation of new shares has been temporarily suspended for RSXfrom March 3, and RSXJ, starting March 2, until further notice. Please refer to the respective press releases regarding RSX and RSXJ for more details. On Friday, March 4 at 4:20 p.m. ET, the Cboe BZX Exchange (Cboe) halted trading in the RSX and RSXJ. As trading is halted, the Funds no longer have a daily closing price and a premium/discount to the net asset value cannot be calculated.
Q: When will RSX and RSXJ start trading again?
A: Cboe has not provided any update on when RSX and RSXJ will begin trading. VanEck continues to be in communication with the exchange.
Q: Will fees on RSX and RSXJ be impacted?
A: Van Eck Associates Corporation (VEAC) has implemented a voluntary management fee waiver for RSX and RSXJ. This voluntary waiver may be withdrawn by VEAC at any time. In addition, expenses for RSX are contractually capped at 0.62% until May 1, 2022. This cap excludes fees and expenses of acquired funds, interest charges, certificate of deposit fees up to 0, 10% of the average daily net assets of the Fund, trading costs, taxes and extraordinary expenses. Expenses for RSXJ are contractually capped at 0.67% until May 1, 2022. This cap excludes fees and expenses of acquired funds, interest charges, certificate of deposit fees up to 0.08% of the average daily net assets of the Fund, trading costs, taxes and extraordinary expenses.
Q: Why is the cash position in RSX and RSXJ currently so high?
A: Both ETFs continue to hold the securities that make up their respective benchmarks. However, the market value weightings of most of these stocks have currently been significantly reduced due to their currently low valuations. As a result, the weight of the cash component increased.
Q: Will the certificates of deposit be converted into locally listed shares?
A: Certificates of deposit generally offer holders, issuers and depositories the option of terminating the certificate of deposit. Holders of certificates of deposit may take up the underlying securities in certain circumstances, subject to the payment of fees, or in other cases the underlying security will be liquidated. In addition, some depositary agents have recently announced their intention to resign as depositary of certain Russian certificates of deposit. In addition, the Russian State Duma (one of the chambers of the Russian parliament) recently voted to order the delisting of shares and certificates of deposit of Russian companies from foreign stock exchanges. However, the negotiation of local quotations remains restricted for foreign investors. Accordingly, the situation is fluid and VanEck continues to monitor developments and will continue to take the necessary steps to protect the interests of shareholders.
1Source: ICE and JP Morgan Data Indexes.
Originally published by VanEck on April 13, 2022.
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This is not an offer to buy or sell, nor a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not imply the provision of personalized investment, financial, legal or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, speak as of the date of this communication and are subject to change without notice. Information provided by third party sources is believed to be reliable and has not been independently verified as to its accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information contained herein represents the opinion of the author(s), but not necessarily that of VanEck.
An investment in RSX and RSXJ may be subject to risks which include, but are not limited to, investment in Russian issuers, foreign securities, emerging market issuers, foreign currencies, certificates of deposit, the basic materials sector , consumer discretionary sector, financial sector, industrial sector, real estate real estate sector, utilities sector, small cap companies, equity securities, market, operational, index tracking, concentration of authorized participants, none active trading market guarantee, trading issues, passive management, fund stock trading, stock fund premium/discount and liquidity risk, issuer specific changes, undiversified and concentration risks, which may all have an adverse effect on the Fund. Investments in foreign and emerging markets are subject to risks, including changes in economic and political conditions, changes in foreign regulations, changes in exchange rates, unstable governments and limited trading capacity which may make these investments volatile or difficult to trade. Small capitalization companies can be subject to high risks.
An investor should carefully consider a Fund’s investment objective, risks, charges and expenses before investing. To obtain a prospectus and a summary of the prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and simplified prospectus carefully before investing.
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