IPE. The fall-out from the Russian invasion of Ukraine should trigger pension funds that invest passively in emerging markets to reconsider their investment style, according to consultants.
Many a pension fund helplessly watched on the sidelines how their investments in Russia lost most of their value in just a matter of days. Many schemes could not sell their investments in the country even if they would have liked to because they were invested in passive mandates or index funds.
After days of deliberations, some pension schemes decided that they wanted to divest from Russia anyway, but then found there was no way to sell their Russian stocks and bonds as trading had been frozen.
Investing passively in countries with an unpredictable political climate, such as Russia, is indeed not to be recommended, said Mathias Neidert, an investment consultant at bfinance.