Vanguard Mutual Fund Manager Suspends Russian Securities Markets

People show up at a Vanguard Group booth at an exhibition during the INCLUSION fintech conference in Shanghai, China, September 24, 2020. REUTERS / Cheng Leng

March 7, 2022

By Ross Kerber

BOSTON (Reuters) – The Vanguard Group has suspended purchases of Russian securities from its actively managed assets, the fund’s top fund manager said on Monday.

The Pennsylvania-based Vanguard said the suspension applies “to our assets, which are managed internally and externally.” He said the company is also working to exit the positions in all index funds.

The statement on Vanguard had a more aggressive line than on Friday when the company said it would not restrict the managers’ investment decisions and a statement sent by a Vanguard spokesman Monday morning that it was in talks with outside managers.

A spokesman did not immediately comment on the change.

Some rival mutual funds have already taken similar steps, as deepening sanctions and public pressure isolate the Russian economy from Western investment and trading partners.

On Thursday, BlackRock Inc. announced that it had suspended the purchase of all Russian securities in its active and index funds. Russia has described its actions in Ukraine as a “special operation”.

Liabilities account for the bulk of the approximately $ 8.1 trillion in Vanguard management, but $ 1.7 trillion of that is in managing assets, with $ 767 billion being managed by external managers such as Wellington Management and B the Baillie Gifford of Scotland.

Total exposure in Russia accounts for less than 0.01% of customers’ assets, Vanguard said. Her statement said she was quick to impose sanctions on Russian banks and others, “and to make the necessary adjustments caused by market closures and changes in index providers.”

Major index providers, including MSCI and FTSE Russell, have also removed Russian stocks and debt.

Morningstar Inc. announced Monday that it would take steps to remove Russian stocks from certain Morningstar indices and make a similar change by removing some Russian debt from fixed income indices.

(Report by Ross Kerber · Additional Report by Davide Barbuscia · Edited by Jonathan Oatis, Will Dunham and David Gregorio)

Vanguard Mutual Fund Manager Suspends Russian Securities Markets

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