The VanEck Russian ETF, RSX, is being liquated. (Read More) This means the fund manager, VanEck, is liquidating the stocks within the fund. Fund holders will receive cash distributions until no assets remain, and the fund is closed. The first distribution was issued on 1/12/2023.
Unfortunately, due to the on-going war in Ukraine and sanctions on the Russian economy, the stocks within the fund have depleted in value significantly. The distributions will be minimal compared to our investment. We will treat the situation as a bankruptcy and recognize the loss after the fund makes the final distribution.
There is no action needed on your part. We will monitor the distributions and make the appropriate adjustment for Lattco AutoPilot clients. Basic Lattco users can account for each distributions as dividends and recognize the loss once the shares are removed from your account.
This was an unprecedented situation. We utilize ETFs as a way to reduce the risk of the Snider Method, but clearly it does not eliminate all risks. We understand that the loss of your investment will cause a great deal of disappointment. All investments come with risks and sometimes things don’t go as planned. We try our best to minimize losses through good screening and proper diversification, but nothing will eliminate the risk of loss when making stock market investments.
We are frustrated with this outcome. Please know that we are here for you and strive for better results in the future.
Original Position Alert: 3/18/2022
The VanEck Russian ETF, RSX has been significantly impacted by the war between Russia and Ukraine. Sanctions imposed by countries around the world have deeply disrupted the Russian economy and financial markets.
At this time, Russian financial markets have been closed. This makes it very difficult to sell or price Russian assets. Trading on RSX shares and options have been halted. We don’t recommend any trading on your RSX shares. You should skip this position until further notice.
Clearly, this is both a concerning and frustrating situation. The sanctions and restrictions imposed by the United States are a non-violent way to support the Ukraine and condemn Russia’s actions. It is unprecedented to see this level of financial influence and restrictions on such a large, developed country.
It is impossible to predict the future in the situation or when a resolution will be reached. We can only hope for a peaceful end to the war and an end to the Russian invasion. At this point, there is nothing that can be done with your RSX position.
RSX is in a frustrating position as it has declined significantly since we initially purchased shares. Unfortunately, it will be in winter until markets stabilize and normal trading resumes. At this time we are not recommending clients sell the shares.
