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Hard to know if this is a kneejerk overreaction or if there is the possibility of contagion among the European banks vis-a-vis any exposure to Russian banks...
TRP Emerging Europe (TREMX) is down -86.24% YTD. 67.61% of assets in Russian stocks. Looks like you can still purchase shares if one has an inkling to do so. Schwab is only allowing redemptions.
Top 10 Holdings MonthlyQuarterly Represents 68.47% of Total Net Assets As of 1/31/2022 Gazprom 15.94% Sberbank of Russia 11.84% Lukoil PJSC 10.81% National Bank of Greece 5.57% Yandex 5.37% Novatek PJSC 4.62% OTP Bank 4.33% Bank Pekao 3.38% Rosneft PJSC 3.35% TCS Group Holding 3.28%
TRP Emerging Europe (TREMX) is down -86.24% YTD. 67.61% of assets in Russian stocks. Looks like you can still purchase shares if one has an inkling to do so. Schwab is only allowing redemptions.
Top 10 Holdings MonthlyQuarterly Represents 68.47% of Total Net Assets As of 1/31/2022 Gazprom 15.94% Sberbank of Russia 11.84% Lukoil PJSC 10.81% National Bank of Greece 5.57% Yandex 5.37% Novatek PJSC 4.62% OTP Bank 4.33% Bank Pekao 3.38% Rosneft PJSC 3.35% TCS Group Holding 3.28%
WOW. Some of their holdings are almost down 100% YTD.
Quite a contrast to US Global Investors Emerging Europe, EUROX, which has fallen "only" 42.16% YTD. They each have about 3/4 in emerging Europe. TREMX has about 6% more in Russia and 5% less in Turkey, otherwise nothing jumps out. This suggests poor issue selection as much as being in the wrong place at the wrong time.
Not that it matters, but one wonders how much of that 86% decline is due to falling stock prices and how much is due to "unfavorable" currency exchange rates. I assume TREMX is unhedged.
TRP Emerging Europe (TREMX) is down -86.24% YTD. 67.61% of assets in Russian stocks. Looks like you can still purchase shares if one has an inkling to do so. Schwab is only allowing redemptions.
Lipper doesn’t show that. But TRP’s own website does. Unconscionable IMHO. What retail investor has the time horizon and patience to own a fund like that? The math will probably reveal that you’d need a 95% gain to make up for that 86% YTD loss!
Sure! Hang in there!
T. Rowe Price sure ain’t what it used to be. That fund makes DraftKings look tame by comparison. You’d need to be severely diminished to loose 86% wagering.
M* also reports TRP's 86% loss. But looking at the portfolio I find that hard to believe.
Looking at the starting (12/31/2021) portfolio, the six worst YTD stocks made up 27.42% of the fund at the beginning of the year. These were the only stocks to lose more than 72% YTD.
[NOVATEK PJSC (NVTK, Russia), XS Retail Group NV (FIVE, Netherlands), TCS Group Holding PLC (TCS, Russia), Gazprom PJSC (OGZD), VK Co. Ltd (VKCO, British VI), and VEON Ltd (VEON, Russia)]
For the sake of argument, say all six lost 99.72% - that's what the worst one did. For the sake of argument, say that the remaining 72.58% lost 72.42% - that's what the worst of the rest did.
Absent any trading, this portfolio YTD lost 79.91%. 27.42% x 99.72% + 72.58% x 72.42% = 79.91%.
That was worst case; five of the six worst stocks lost less than 99.72%, and most of the others lost much less than 72.42. One Greek stock, Jumbo SA (BELA) even made money. So the actual loss of this portfolio was much less than 80%, let alone 86%.
Either TRP's figure is way off, or the fund made some of the worst trades on record in the first couple of months of 2022.
The biggest stinker (i.e. largest holding and one of the worst YTD returns) is Gazprom PJSC (OGZD), representing just under 16% of the fund and losing 93.71% YTD.
Using a beginning value of $10K on 1/1/22 and an ending value of $1375.76 at the close on 3/4/22 it does compute to an 86.24% loss YTD. Whether $10K is the correct starting value I'll let others figure out.
Kind of interesting.....Russian ADRs are still ok to trade, but Russian stocks are not.
"Friday at 4 a.m., the NYSE Arca brought trading of the iShares MSCI Russia ETF (ERUS) to a halt. The reasons cited were its exposure to the Russian market, MSCI’s removal of Russian stocks from its indexes and the closure of Russia’s stock market, according to a press release.
The $124 million VanEck Russia ETF (RSX) continues to trade; however, while ERUS holds Russian stocks, RSX mainly holds depositary receipts, which are not currently restricted from trading."
The discrepancy between the performance of the stated fund share price and the performance of the portfolio may be due to fair value pricing. https://www.sec.gov/news/press-release/2020-302
Morningstar provides last trade price, which for Russian stocks was Feb 25. A bit stale.
Rerunning the numbers, assuming that TRP completely wrote off all Russian stocks, one gets a loss of around 77%. If TRP "marked down" some non-Russian securities as well, that could account for the other 9% in losses.
Assuming that's what is going on, it is instructive to compare with EUROX. That fund, as of start of year, had over 56% invested in Europe. So if it had written off its Russian holdings, the fund would have dropped in fair value price at least 56%. Yet its YTD loss is a much smaller 42%.
(The fund did have a few winners that may have boosted its YTD return by a couple of percent, but these were well outweighed by its non-Russian losers.)
What this suggests is that how a fund prices its holdings can make a huge difference in its stated performance. Also, that the fund's board does matter. While funds can delegate pricing to third parties, the board retains oversight and is ultimately responsible for the prices.
A fund that does not mark down properly may fail redemptions, which could expose the fund family and board to worse legal and sentiment risks. Russia did not have a stock market for nearly 70 years before the 1990s. There is no saying that it will not happen again - it does have a history of enabling (fascination for) strongmen who by nature do not conform to norms.
The war is only two weeks old. With so many US / western European businesses exiting / suspending their Russian businesses, either these businesses anticipate the ever increasing Russian sanctions / trade embargos will continue for a long, long time or these businesses do not have a good sense for the their ability to do business in Russia / Ukraine / Belarus in the near future and thought taking a write off of big chunks of their Eastern European assets in Q1 would be a good idea. Is it a moral message (I am reading in the press) businesses are trying to send to Putin or is it an exercise in business outlook and the resultant balance sheet / income statement (i.e., financial statements) impact? What is the primary driver?
@BalueBalu - one would have to "assume" its much more than virtue signaling. These companies perceive a long-term issue with doing business there. There's been enough credit and banking disruption that it will likely take them much longer to recover. Big business forecasts this. The damage can't be undone.
@BalueBalu - one would have to "assume" its much more than virtue signaling. These companies perceive a long-term issue with doing business there. There's been enough credit and banking disruption that it will likely take them much longer to recover. Big business forecasts this. The damage can't be undone.
Thanks. The market’s reaction too seems that way. Q1 earnings for one may not be good, along with some padding to the one time impairment.
Revisiting TRP Emerging Europe (TREMX) one week later finds the fund up around 1%, YTD -85.27% compared to -86.24%. AUM down to $23 million according to M* today. From what I recall last Saturday on the TRP website, AUM were something like $145 million +/-, but I'm not sure as of what date that was.
Comments
Hard to know if this is a kneejerk overreaction or if there is the possibility of contagion among the European banks vis-a-vis any exposure to Russian banks...
Top 10 Holdings
MonthlyQuarterly
Represents 68.47% of Total Net Assets
As of
1/31/2022
Gazprom
15.94%
Sberbank of Russia
11.84%
Lukoil PJSC
10.81%
National Bank of Greece
5.57%
Yandex
5.37%
Novatek PJSC
4.62%
OTP Bank
4.33%
Bank Pekao
3.38%
Rosneft PJSC
3.35%
TCS Group Holding
3.28%
Not that it matters, but one wonders how much of that 86% decline is due to falling stock prices and how much is due to "unfavorable" currency exchange rates. I assume TREMX is unhedged.
Unsurprisingly, LETRX is down 91.8% YTD.
Sure! Hang in there!
T. Rowe Price sure ain’t what it used to be. That fund makes DraftKings look tame by comparison. You’d need to be severely diminished to loose 86% wagering.
Looking at the starting (12/31/2021) portfolio, the six worst YTD stocks made up 27.42% of the fund at the beginning of the year. These were the only stocks to lose more than 72% YTD.
[NOVATEK PJSC (NVTK, Russia), XS Retail Group NV (FIVE, Netherlands), TCS Group Holding PLC (TCS, Russia), Gazprom PJSC (OGZD), VK Co. Ltd (VKCO, British VI), and VEON Ltd (VEON, Russia)]
For the sake of argument, say all six lost 99.72% - that's what the worst one did.
For the sake of argument, say that the remaining 72.58% lost 72.42% - that's what the worst of the rest did.
Absent any trading, this portfolio YTD lost 79.91%.
27.42% x 99.72% + 72.58% x 72.42% = 79.91%.
That was worst case; five of the six worst stocks lost less than 99.72%, and most of the others lost much less than 72.42. One Greek stock, Jumbo SA (BELA) even made money. So the actual loss of this portfolio was much less than 80%, let alone 86%.
Either TRP's figure is way off, or the fund made some of the worst trades on record in the first couple of months of 2022.
http://portfolios.morningstar.com/fund/details?t=TREMX (M* premium - all 41 stocks)
http://portfolios.morningstar.com/fund/holdings?t=TREMX (basic - top 25 stocks)
The biggest stinker (i.e. largest holding and one of the worst YTD returns) is Gazprom PJSC (OGZD), representing just under 16% of the fund and losing 93.71% YTD.
"Friday at 4 a.m., the NYSE Arca brought trading of the iShares MSCI Russia ETF (ERUS) to a halt. The reasons cited were its exposure to the Russian market, MSCI’s removal of Russian stocks from its indexes and the closure of Russia’s stock market, according to a press release.
The $124 million VanEck Russia ETF (RSX) continues to trade; however, while ERUS holds Russian stocks, RSX mainly holds depositary receipts, which are not currently restricted from trading."
https://www.sec.gov/news/press-release/2020-302
Morningstar provides last trade price, which for Russian stocks was Feb 25. A bit stale.
Rerunning the numbers, assuming that TRP completely wrote off all Russian stocks, one gets a loss of around 77%. If TRP "marked down" some non-Russian securities as well, that could account for the other 9% in losses.
Assuming that's what is going on, it is instructive to compare with EUROX. That fund, as of start of year, had over 56% invested in Europe. So if it had written off its Russian holdings, the fund would have dropped in fair value price at least 56%. Yet its YTD loss is a much smaller 42%.
(The fund did have a few winners that may have boosted its YTD return by a couple of percent, but these were well outweighed by its non-Russian losers.)
What this suggests is that how a fund prices its holdings can make a huge difference in its stated performance. Also, that the fund's board does matter. While funds can delegate pricing to third parties, the board retains oversight and is ultimately responsible for the prices.
See thread on Mairs and Power proxy vote (in large part a vote to change to a new board).
https://mutualfundobserver.com/discuss/discussion/59232/mairs-power-proxy-vote-on-murkiness
Futures bright red - bloody
EU NASDAQ + EEM bears
SP500 DJI follow soon
probably holding patterns for 2-6 wks now/no buying
Prob keep holding big vehicles sp500 dji etf/soxl spxl +20s% bonds for short /medium terms