Following MSCI's announcement that it will be closing the index that underpins the Russia ETF, DWS will terminate the ETF.
The Xtrackers MSCI Russia Capped Swap UCITS ETF (XMRD) will undergo final index computations on December 16 and a mandatory redemption will take place on December 19 before the fund is delisted on December 20.
The ETF's total assets under management as of March 2022 were £82 million.
DWS issued a statement stating that due to the fund's valuation, redemptions would be "zero or close to zero"
"The index administrator has recently advised that the reference index will be discontinued as of 1 March 2023," according to DWS.
"In addition, the current derivatives invested in by the sub-fund are due to expire and the sub-fund will not be able to renew these derivatives due to applicable sanctions legislation."
On December 20, the fund will cease trading on the London Stock Exchange, Deutsche Boerse, and Borsa Italiana.
In response to Russia's invasion of Ukraine, it was first suspended on March 1. However, DWS decided to keep the fund alive because it depended on a swaps-based exposure that mimicked Russian stocks, providing a benchmark from which to determine underlying valuations.
Other Russian ETFs used GDRs as their primary depository. After new Russian federal legislation delisted depositary receipts reflecting shares of Russian enterprises from markets abroad, Invesco's RDX UCITS ETF (RDCS) was shut down in June.
Depository receipts from BlackRock were changed into underlying shares.
XMRD is one of four Russia ETFs now available in Europe, along with two offerings from Lyxor – the PEA Russia MSCI Russia IMIM Select GDR UCITS ETF (PRUS) and the Lyxor Russia UCITS ETF (RUS – as well as HSBC's MSCI Russia Capped UCITS ETF (HRUD).
By fLEXI tEAM