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HSBC AM to close Europe’s last Russia ETF

HSBC, close, Russia, ETFThe last remaining European-listed Russia equity ETF is to be closed on the first anniversary of the conflict.

HSBC Asset Management's €63.4 million MSCI Russia Capped Ucits ETF (HRUD) will be shuttered after data and indices provider MSCI announced it would cease index calculations for the strategy on March 1.

The fund will be delisted from the London Stock Exchange, Six Swiss, Borsa Italiana and Deutsche Boerse.

Launched in July 2011, the ETF posted a one-year trailing return of -50.92%, according to data from Morningstar.

MSCI had announced the MSCI Russia Capped Index would close back in November 2022, but HSBC has now decided the fund is "no longer practical nor advisable".

"Consequently, in accordance with the articles of association, the directors have determined it is now appropriate to redeem all of the shares and to terminate the fund on the closure date," HSBC said in a statement.

But Russian securities cannot currently be sold, meaning it is unlikely for shareholders to see any form of distribution following the closure of the fund.

"In the event that it is possible to sell and realise any value from the fund's investments at a future date, the proceeds arising from the sale shall be paid to shareholders on a pro-rata basis in accordance with each shareholder's relevant holding in the fund," HSBC added.

Earlier in February, Amundi terminated the Lyxor MSCI Russia Ucits ETF (RUS) – a strategy which also tracked the MSCI Russia Capped Index.

Shortly after the invasion of Ukraine, MSCI dubbed Russia "uninvestable", with exchanges ceasing trading of Russia ETF units in the days after.

Russian law 114-FX then cancelled all foreign derivatives programmes, leaving investors with marked-down or nil-valued equities.

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