- Our exposure to Russian assets is marginal across our portfolios.
- Our holdings were made prior to the attacks via secondary markets.
- Russian markets remain closed, divestment is currently not possible.
At MD Financial Management (MD) we stand firmly with the people of Ukraine. We continue to comply with all applicable sanctions and restrictions.
Minimal Russian exposure in MD Funds and Portfolios
The minimal Russian holdings in MD Funds and Portfolios were made prior to the attacks via secondary markets. As an example, the MD Precision Moderate Balanced Portfolio has a 0.12% allocation to Russian securities. This exposure comes via the Portfolio’s investment into the MDPIM Emerging Markets Equity Pool, which has a Russian security weight of approximately 2.5%, across 36 holdings and some Russian ruble. The MDPIM Emerging Markets Equity Pool makes up 4.7% of the MD Precision Moderate Balanced Portfolio.
Divesting from Russian assets
We are unable to exit our positions at this time – the Russian stock market remains closed, as do foreign exchange markets and pretty much anything to do with the Russian economy. For now, the 36 Russian holdings in MD Funds and Portfolios are effectively frozen. Going beyond current sanctions and restrictions, the MD Investment Oversight Committee will need to approve any transaction involving Russian assets moving forward.
Please note that MD will still collect interest, receive repayment of bonds and settle any derivative contracts, as applicable, involving our outstanding Russian holdings, consistent with relevant sanctions requirements. However, we can confirm that we have no intention of increasing our investments in Russian assets.
As always, we will continue to assess the evolving situation and adjust our positioning when appropriate. For additional information about the situation, our positioning, or your portfolios, please reach out to your MD Advisor*. For more information about Russia’s invasion of Ukraine and how it has impacted global markets, please read this earlier blog post.
* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.
The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.