Russia’s recent invasion of Ukraine and the economic sanctions that were imposed sent shockwaves through the global financial markets. As a result, the Russian Ruble plummeted to a record low, Russian stock markets were shattered, and Russian equities were removed from emerging markets indices. This week on Grow Money Business, Grant discusses how this situation affects the investment accounts and portfolios of U.S. investors and the ramifications of these phenomena, and why your index funds no longer hold Russian stocks.

 

 

Show Notes

[04:04] Index Funds – Grant dives deep into index funds, explaining market capitalization, the roles of index providers and fund managers, and depository receipts.

[12:54] Russia’s Present Condition – Russia has been obliterated from the list of index providers. As a result, Russian stocks are no longer on the list. Grant provides his perspective on the background of what’s going on regarding index funds and Russian exposure.

[16:00] Inflationary Problems – Grant highlights Russia’s inflationary difficulties, emphasizing the importance of currency.

[23:36] Remedies – Grant outlines two alternatives available to a country if the value of its currency falls through the floor .

[28:15] Greece – While noting that Russia is a growing market, Grant discusses the events Greece experienced a few years ago.

Resources

Graphic: Russia stored large amounts of money with many countries. Hundreds of billions of it are now frozen
nbcnews.com/data-graphics/russian-bank-foreign-reserve-billions-frozen-sanctions-n1292153

Russia Interest Rate
tradingeconomics.com/russia/interest-rate#:~:text=Interest%20Rate%20in%20Russia%20averaged,percent%20in%20July%20of%202020.

Russia is no longer an option for investors.
edition.cnn.com/2022/03/15/investing/brics-emerging-markets-russia/index.html

What Happens to Indexes and Funds That Need to Dump Russia?
bloomberg.com/news/articles/2022-03-04/how-dumping-russia-is-creating-chaos-for-index-funds-quicktake