| BOSTON, April 20
BOSTON, April 20 U.S. fund managers warned this
month of risks shareholders could face from current or future
Western sanctions against Russia, underscoring the stakes for
emerging-markets investors arising out of the turmoil in
Securities filings since April 4 outlined potential problems
for funds including the $124.6 million ING Russia Fund
, the $841.1 million SSgA Emerging Markets Fund
and a number of iShares exchange-traded funds offered
by BlackRock Inc.
An April 4 filing for the SSgA fund, for instance, noted
that current or future sanctions by the U.S. or the European
Union could result in the devaluation of Russian currency, a
downgrade in its credit rating, and a decline in the value and
liquidity of Russian stocks. Sanctions also could lead to a
freeze of Russian securities, it stated.
An April 10 filing for ING Russia Fund gave similar cautions
if the U.S. imposes economic sanctions against companies in
various sectors of the Russian economy such as financial
services, energy or mining. The fund could seek to suspend
redemptions if it could not dispose of securities or determine
the value of net assets, the filing states.
A representative for the U.S distributor of ING Russia Fund,
Voya Financial Inc, declined to comment, as did
BlackRock Inc. A spokeswoman for State Street Corp,
parent of the SSgA fund, said executives were not available to
comment. The funds represent only a small portion of total
assets the firms manage.
U.S. securities regulators contacted fund firms with
holdings in Russia last month, to make sure they were properly
managing risk and disclosing the assets to investors.
A spokeswoman for the U.S. Securities and Exchange
Commission declined to comment about this month's filings.
International negotiators in Geneva reached a deal on
Thursday to defuse the East-West crisis in Ukraine, but tensions
have not abated and U.S. officials have threatened further
sanctions on Moscow if the stalemate continues.
On Friday, U.S. national security adviser Susan Rice said:
"Those costs and sanctions could include targeting very
significant sectors of the Russian economy."
Washington, with the European Union, has since March imposed
sanctions such as visa bans and asset freezes on a small number
of individuals. Targets have included Russian government
officials and separatist leaders in Crimea, the peninsula taken
over by Moscow last month.
Some EU states are reluctant to do more, fearing it could
further provoke Russia or end up hurting their own economies,
which rely heavily on Russian gas and oil. Meanwhile, Russia's
economy is already stagnating and rising tensions have shaken
investor confidence, driving down stock indexes.
Technically the warnings by the fund firms this month
supplement filings the managers had already made outlining risk
factors for the emerging market funds, an sector that can be
[A sample of the disclosures is here: here
(Reporting by Ross Kerber in Boston. editing by Gunna Dickson)