An update on Vanguard funds
Exposure to Russian securities in Vanguard funds
April 01, 2022
As governments around the world impose sanctions on Russian financial institutions, companies, and individuals, our clients naturally have questions about the Russian exposure of Vanguard funds.
The following chart shows the U.S.-domiciled Vanguard funds with direct exposure to Russian securities as of March 31, 2022. Relative to our last update in early March, the data reflect an increase in liquidity in a limited number of Russian securities traded in the UK and U.S., which affected the value of some holdings. The exposures reflect fair-value pricing, which is described below. Funds and ETFs with 0.00% exposure hold Russian securities currently deemed worthless.
* Certain of these funds have both mutual fund and ETF share classes and, as share classes of the same fund, have the exposure listed above. Note that this list does not include Vanguard funds of funds, some of which may have indirect exposure to Russian securities because they invest in underlying funds with direct exposure.
The full holdings of most Vanguard funds as of the end of each month are updated on our websites around the middle of the following month. An exception applies to certain of our exchange-traded funds (ETFs), which disclose their holdings daily.
How Vanguard prices securities that are not trading actively
Because market quotes for Russian securities may not be readily available, Vanguard’s internal pricing review committee will use a variety of observable market indicators that are deemed reliable to adjust these securities’ value appropriately. The net asset values of our mutual funds and ETFs will reflect these fair-value pricing adjustments. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities.
For additional information, please refer to Russian sanctions, index changes, and Vanguard funds.
Related content
- Our market volatility hub addresses the war in Ukraine and resulting uncertainty for investors. Visit the hub.
Notes:
Vanguard published an earlier version of this article on March 9, 2022.
For more information about Vanguard funds, ETFs, or annuity products visit vanguard.com to obtain a fund or annuity contract prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
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Investments in securities issued by foreign companies and governments are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.
Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.
Vanguard Total International Bond Index Fund is subject to currency hedging risk, which is the chance that currency hedging transactions may not perfectly offset the funds’ foreign currency exposures and may eliminate any chance for a fund to benefit from favorable fluctuations in relevant currency exchange rates. The funds will incur expenses to hedge their currency exposures.
The Emerging Markets Government Bond Index Fund is subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer’s ability to make payments. The Fund seeks to track the performance of an index that measures the investment return of dollar-denominated bonds issued by governments of emerging market countries (including government agencies and government-owned corporations). Because the Fund invests only in U.S. dollar-denominated bonds, U.S.-based shareholders are not subject to currency risk. The Emerging Markets Government Bond Index Fund is subject to risks including country/regional risk, which is the chance that political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by foreign governments, and emerging market risk, which is the chance that bonds of governments located in emerging markets will be substantially more volatile and substantially less liquid than the bonds of governments located in more developed foreign markets.
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