iShares 11/Apr/2022

UPDATE: On 10 March, we published a list of actions BlackRock had taken in response to the Russian attack on Ukraine. This post was updated on 11 April, to reflect developments related to index changes and the status of the Russian marketplace.

BlackRock stands with the Ukrainian people and condemns the brutal aggression of the Russian government. As our CEO Larry Fink stated in March, this is a horrific humanitarian tragedy and BlackRock is doing what it can to provide support to all those impacted.

As of the end of February, Russian securities accounted for less than 0.01% of our clients’ assets, mostly in our index portfolios, which seek to track indexes that have, or until recently had, Russian investment exposure. Please follow this link to see our ETF holdings of Russian securities as of 18 Feb., 2022, the last trading day before the Russian escalation of hostilities, which can be compared with current holdings on individual fund webpages.

As we manage your investments throughout this crisis, below is a summary of the actions we have taken to date:

  • BlackRock suspended the purchase of Russian securities in our active and index funds on Monday, 28 Feb., 2022.
  • Valuations and subscriptions and redemptions on the primary market have been suspended for iShares MSCI Russia ADR/GDR UCITS ETF from 3 March, 2022 and iShares MSCI Eastern Europe Capped UCITS ETF from 2 March, 2022. In addition, BlackRock has voluntarily and temporarily waived the total expense ratios (TERs) that BlackRock is entitled to be paid by the ETFs, with effect from 2 March, 2022, until further notice.
  • Starting on 4 March, 2022, European exchanges began to suspend trading in the iShares MSCI Russia ADR/GDR UCITS ETF and the iShares MSCI Eastern Europe Capped UCITS ETF.
  • All major index providers began the removal of Russian securities from their indexes beginning the week of 7 March, 2022, including from many broad-based international and emerging markets indexes that iShares ETFs seek to track.
  • We will continue actively consulting with regulators, index providers and other market participants to help our funds to exit their positions in Russian securities, consistent with removal of the securities from applicable underlying indexes, whenever and wherever regulatory and market conditions allow.
  • As of 7 April, 2022, the Moscow Exchange is open for local investor trading activity only, and the Moscow Exchange has not yet communicated or issued plans to re-open for non-resident trading activity.
  • BlackRock’s Pricing Committees determine fair market values for the Russian securities in our index portfolios through a formal process governed by a pricing policy.
  • We are monitoring the market quality of all our ETFs (which are continuing to trade on exchange) to ensure that the surrounding ecosystem system is strong and performing as expected.
  • BlackRock has three primary objectives when managing index funds in accordance with their investment objective: 1) maintain tight tracking relative to the benchmark index; 2) minimize market impact around the index change event; and 3) minimize transaction costs. We will continue to assess best methods to manage impacted portfolios in accordance with these best practices.
  • We will continue to manage our funds as a fiduciary, taking a disciplined, pragmatic and adaptable approach to reflecting index changes, while remaining in compliance with all sanctions.

Russia’s unprovoked attack on Ukraine is a tragedy and has created a highly complex and fluid situation. BlackRock provides specific guidance on funds or market conditions as needed.