Mutual fund manager Vanguard suspends purchases of Russian securities

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

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BOSTON, March 7 (Reuters) – Vanguard Group has suspended purchases of Russian securities from its actively managed funds, the leading mutual fund manager said on Monday.

Pennsylvania-based Vanguard said the suspension applies “to all of our active internally and externally managed funds.” He said the company was also working to eliminate positions in its index funds.

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

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A representative for Vanguard did not immediately respond to a request for 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 (BLK.N) announced that it suspended the purchase of all Russian stocks in its active and index funds. Read more

Franklin Templeton (BEN.N) said on Friday he would make no new investments in Russia or Belarus in sovereign or corporate debt, or public or private equity, and may take further action.

Russia has called its actions in Ukraine a “special operation”.

Passive index funds make up the bulk of Vanguard’s approximately $8.1 trillion under management, but $1.7 trillion is under active management, including $767 billion managed by external managers such as Boston’s Wellington Management and Baillie Gifford. from Scotland.

Total exposure to Russia is less than 0.01% of client assets, Vanguard said. Its statement said it moved quickly to apply sanctions against Russian banks and others, “and to make the necessary adjustments prompted by market closures and index provider changes.”

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

Morningstar Inc (MORN.O) said on Monday it would take steps to remove Russian equities from certain Morningstar indexes and make similar changes by removing certain Russian debt from fixed income indexes.

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Reporting by Ross Kerber and Davide Barbuscia; Editing by Jonathan Oatis, Will Dunham and David Gregorio

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