People are seen at a booth of Vanguard Group at a fair during the INCLUSION fintech conference in Shanghai, China September 24, 2020. REUTERS/Cheng Leng
March 7, 2022
By Ross Kerber
BOSTON (Reuters) -Vanguard Group has suspended purchases of Russian securities from its actively managed funds, the top mutual fund manager said on Monday.
Pennsylvania-based Vanguard said the suspension applies “across our internally and externally managed active funds.” It said the company is also working to exit positions across its index funds.
The statement https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/vanguards-response-to-war-in-ukraine.html on the Vanguard website took a more aggressive line than on Friday when the company had said it would not restrict managers’ investment decisions, and a statement sent by a Vanguard spokesperson Monday morning that it was in talks with external managers.
A representative did not immediately comment on the change.
Some rival fund companies had already taken similar steps as deepening sanctions and public pressure isolate Russia’s economy from Western investment and trading partners.
On Thursday, BlackRock Inc said it had suspended the purchase of all Russian securities in its active and index funds. Russia has called its actions in Ukraine a “special operation.”
Passive index funds account for most of Vanguard’s roughly $8.1 trillion under management, but $1.7 trillion of that is in actively managed funds, with $767 billion run by external managers such as Wellington Management of Boston and Baillie Gifford of Scotland.
Total exposure to Russia accounts for less than 0.01% of client assets, Vanguard said. Its statement said it moved quickly to carry out sanctions against Russian banks and others, “and to make needed adjustments prompted by market closures and index provider changes.”
Major index providers, including MSCI and FTSE Russell, also have been removing Russian equities and debt.
Morningstar Inc on Monday said it would take steps to remove Russian equities from certain Morningstar indexes, and make similar change removing certain Russian debt from fixed-income indexes.
(Reporting by Ross Kerber; Additional reporting by Davide Barbuscia; Editing by Jonathan Oatis, Will Dunham and David Gregorio)
