Why Russia ETFs Are Extending Declines Today

The VanEck Russia ETF RSX fell by more than 30% Monday after the U.S. issued new sanctions against Russia in the wake of the Ukraine invasion.

Russia ETFs continue to trade lower Tuesday as other countries increase sanctions against Russia and the Moscow Exchange remains closed. 

The VanEck Russia ETF is now down about 75% from the highs it made in October. The IShares MSCI IShares MSCI Russia ETF ERUS is also under significant selling pressure Tuesday.

BlackRock, which runs the iShares family of ETFs, issued a note to investors Tuesday morning announcing it’s temporarily halting the creation of new shares in the fund. 

"Following the US economic sanctions on Russian corporate and banking entities, closures to Russian securities markets, and Russian government imposed capital controls, the liquidity of Russian securities and its currency has experienced significant declines," Blackrock said in the note.

"In light of these circumstances, the iShares MSCI Russia ETF has temporarily suspended the creation of new shares until further notice."

Russia-based stocks listed on both the New York Stock Exchange and Nasdaq were halted Tuesday.

RSX, ERUS Price Action: At publication time, the VanEck ETF was down 17.5% at $8.95 and the IShares ETF was down 31.5% at $12.34.

Photo: Bohdan Bobrowski from Flickr.