The stock markets have reacted strongly to the Russian crisis. However, the further development of the political situation is not foreseeable. As an investor, you can neither predict where prices will go nor when the situation will calm down again. We strongly advise against speculating on short-term gains with your savings now.
Investors should also not sell frantically now, but be patient: You run the risk of losing money with hasty decisions. No one can predict long-term trend changes anyway. Those who bet on shares for the long term can wait calmly for further developments.
Those who nevertheless cannot stand the situation should question or redefine their investment horizon and decide on this basis. If you sell today, you will realise the losses and have to accept negative real interest rates in view of the low interest rates on, for example, overnight and fixed-term deposits.
Read more about money in the Russian crisis in our separate article.
How badly are investment funds affected by the Russian crisis?
Only a very small share of the equity funds distributed in Germany is invested in Russian securities. The analysis puts the share of Russian shares in the mutual funds or ETFs distributed in Europe at 0.27 per cent. That is 32.8 billion euros of the total volume of 12 trillion euros.
Current price declines or fluctuations of such funds are therefore not determined by the significant losses of Russian shares, but by the general uncertainty and the economic impact of the Ukraine war on Western companies.
However, there are also funds and ETFs with high Russian shares. These are primarily emerging market funds, Russia funds, BRIC funds (Brazil-Russia-India-China funds) and Eastern Europe funds. These have between 3 and 68 percent invested in Russian securities.
For Eastern Europe and Russia funds, JP Morgan Asset Management, for example, has suspended the issue and redemption of units indefinitely. Other providers are expected to follow suit. Invested investors are currently unable to dispose of their assets. We can only speculate about the situation after the crisis.
Investors who have invested in globally investing funds and ETFs should not rush to cancel or suspend savings plans. Investments in equity funds should always be long-term and take fluctuations into account, even during crises. In the past, stock prices have recovered relatively quickly after crises – 2007 world financial crisis, 2011 euro crisis, 2015 China crisis and 2020 Corona crisis. The MCSI World ETF has an average return of around 7 per cent over the past 15 years despite these events.
