Trading and transfer of VanEck RSK ETF
The VanEck Associates RSK ETF, is a ETF fund that tracks the MVRSXTR Index (MVIS Russia Index). The MVIS index is still published and current, but is down c. 33% YTD 2022, as the index is still ongoing the RSX fund should not be required to liquidate or sell individual positions.
As a result of U.S. sanctions imposed on Russian securities trading and on Russian corporate and banking entities, VanEck announced that the “Russia ETF (Cboe: RSX) will temporarily suspend the creation of new shares until further notice, beginning March 3, 2022”, to date it has remained suspended. Most of the funds positions are marked at 0, whilst that may seem a harsh assessment of their value, given the restrictions on selling and transferring shares – and inability to meet daily redemptions – inflows, there is little the fund can do but either go in to liquidation or remain suspended for the foreseeable future.
For most prudent holders the suspension of dealing and the large reduction in the fund NAV, will mean that they have considered or already written off all or some of the fund value. There is a chance that there is a reversal in the sanctions environment but our experience in dealing with Cuba, Venezuela and Sudan debts guides us to a much longer time horizon for the sanctions to be wound back.
For holders that have shorter time horizons or who maybe no have an ability to hold the RSX fund, Southey Capital has a multitude of custody accounts in different jurisdictions and benefits from having no Russian or US beneficial ownership or location, so we have a greater flexibility to trade or take on our books difficult assets like the fund.