Ukraine crisis: investment implications for emerging market equities

As events continue to unfold in Ukraine at a rapid pace, Emerging Market Equities portfolio manager Nick Price reviews recent developments and looks at the key implications of recent sanctions on Russia. He provides an insight into his current positioning in Russia and the broader investment outlook from here.

Key points:

  • The Ukraine conflict and related Russian sanctions are likely to have a significant inflationary shock on the global economy that persists longer than previously anticipated.
  • SWIFT restrictions will put huge pressure on Russia’s banking system. Additionally, the Central Bank of Russia has now stepped in, suspending distribution of dividends and coupons to non-Russian residents.
  • Our EM equities portfolios were generally overweight Russia going into this crisis. Our exposure has come down, but we will avoid knee-jerk reactions to fast moving events.

Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.

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