The following message reflects fund related developments and the status of the Russian market as of April 13, 2022.
Q: How are funds with Russian exposure being managed?
A: VanEck continues to manage all funds as a fiduciary, in a way that is in the best interests of our shareholders. We are constantly assessing current market conditions and monitoring new developments and will take the actions which we believe will best allow us to manage the funds.
Q: What is the current exposure to Russia in my fund?
A: VanEck fund holdings can be found on the webpage for each fund at vaneck.com. ETF holdings are updated daily and show the number of shares held and current market values. Mutual fund holdings are updated as of each month-end.
Q: Have Russian securities been removed from the indices that my ETF tracks?
A: ICE Data Indices and J.P. 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 the 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 tradeable?
A: The liquidity of Russian securities remains extremely limited, and foreigners continue to be restricted from trading in the local Russian market. No announcement has been made by the Moscow Exchange pertaining to future plans to re-open trading for non-Russian investors. Further, depositary receipts have generally ceased trading.
Q: How are Russian securities valued?
A: Securities are valued in accordance with the funds’ pricing policy, which is described in each fund’s prospectus. A fund’s net asset value may reflect certain portfolio securities’ fair values rather than their market prices at the time the exchanges on which they principally trade close.
The daily value of our ETF portfolio holdings can be found on each fund’s webpage at vaneck.com.
Q: What is the current status of VanEck Russia ETF (RSX) and VanEck Russia Small-Cap ETF (RSXJ)?
A: The creation of new shares was temporarily suspended for RSX, effective March 3, and RSXJ, effective March 2, until further notice. Please refer to the respective press releases regarding RSX and RSXJ for further details. On Friday, March 4, at 4:20 pm ET, the Cboe BZX Exchange (Cboe) halted trading of RSX and RSXJ. Since trading is halted, the Funds no longer have a daily closing price and a premium/discount to NAV cannot be calculated.
Q: When will RSX and RSXJ begin 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 the fees on RSX and RSXJ be impacted?
A: Van Eck Associates Corporation (VEAC) has implemented a voluntary waiver of its management fee for RSX and RSXJ. This voluntary waiver may be eliminated by VEAC at any time. In addition, expenses for RSX are capped contractually at 0.62% until May 1, 2022. This cap excludes acquired fund fees and expenses, interest expense, depositary receipt fees up to 0.10% of the Fund’s average daily net assets, trading expenses, taxes and extraordinary expenses. Expenses for RSXJ are capped contractually at 0.67% until May 1, 2022. This cap excludes acquired fund fees and expenses, interest expense, depositary receipt fees up to 0.08% of the Fund’s average daily net assets, trading expenses, 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 comprise their respective benchmarks. However, the market value weights of most of these securities have currently been reduced substantially due to their currently low valuations. As a result, the cash component weight has increased.
Q: Will depositary receipts be converted to locally listed shares?
A: Depositary receipts generally allow holders, issuers, and depositaries the option to terminate the depositary receipt. Depositary receipt holders may take delivery of the underlying securities in certain circumstances, subject to payment of fees, or in other instances, the underlying security will be liquidated. In addition, certain depositary agents have recently announced plans to resign as depositary for certain Russian depositary receipts. Further, the Russian State Duma (one of the chambers of the Russian parliament) has recently voted to order the delisting of Russian companies’ shares and depositary receipts from foreign stock exchanges. However, trading of local listing remains restricted for foreign investors. Accordingly, the situation is fluid and VanEck continues to monitor developments and will continue to take actions as needed in order to protect the interests of shareholders.
