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From Woodford to the open-ended property sector, DFMs have generally managed to get out of troubled funds long before trading suspensions even became a possibility.
Now, with some Russia-focused funds drawing down the shutters - Liontrust Pictet and JPMorgan having suspended their Russia funds - the esoteric nature of such portfolios makes it unlikely many DFMs were ever investors in the first place.
But if allocators have little exposure to these latest suspensions, some more mainstream portfolios are exposed, if moderately so, to plummeting Russian equities.
A total of 175 open-ended funds have some exposure to Russian equities, with 14 having more than 50 per cent of their portfolio invested there.
So how exposed are DFMs to this? Well, not very.
A good number of DFMs are exposed to EM funds that have at least some allocation to Russia and now find themselves in a sticky situation after Russia's ban on Western investors exiting their Russian holdings.
As our chart shows, of those portfolios with a decent DFM following, three had more than 7 per cent of assets in Russia, though these positions may have changed between them being reported and the fallout of the invasion.
Indeed Hermes has told us they have sold out of their Russian positions completely in the past few weeks.
That’s admittedly not huge, but it might cause a few headaches, and give fund buyers pause for thought.
More generally we’ll see if this is another spanner in the works for emerging markets, which once again lag all other major equity regions over a 10-year horizon, or if it instead gives rise to mispricing for DFMs’ favourite stockpickers to exploit.
It’s also worth asking whether it reinforces a trend we noted back in 2018, of allocators increasingly turning to Asia funds rather than their EM counterparts.
On the other side of the coin, investors may wonder if the Chinese regulatory blitz that dominated both Asian and EM indices last year is really over and done.
An eerie calm
The real risk for investors, of course, is that the geopolitical crisis at hand sends all equity markets into a tailspin together. But if 2022 remains a challenging year for stocks, some have sensed an eerie calm for the time being.
Capital Economics argues Russia now faces a financial crunch that could prove even worse than both 2014’s balance of payments crisis and the 2008 financial crash.
Given the extreme nature of the situation, the research house makes the case that major markets have weathered the past few days surprisingly well. For further evidence see the S&P 500, which ended yesterday above its pre-invasion level.
Two explanations are offered up for this. First, Capital argues that investors see the economic impact of the war as fairly minor. For example energy supplies have not yet been disrupted and the chances of Nato forces being drawn in directly appear low. Though further escalation is tragically plausible.
The second rationale harks back to a well-known dynamic of recent years: that bumps in the road slow the pace of a seemingly inevitable monetary tightening. In other words, we may find ourselves back in "good news is bad news" territory, where problems equal a stay of execution for loose monetary policy.
On a related note, some of the classic safe haven assets have regained their poise amid recent uncertainties. The gold price has mainly marched upward in recent weeks, while government bond prices have risen on the back of the recent news from Ukraine.
But, as Capital concludes, this situation may simply leave risk assets caught between two difficult possibilities. Either the war escalates, causing more suffering, economic hardship and market volatility, or peace breaks out and all eyes turn back to central banks. Allocators have another tightrope to walk.
Trouble at home
Back in the UK market, the current crisis has prompted action - and headlines - for the energy majors. BP declared it would walk away from its Rosneft shareholding, shortly followed by Shell making its own efforts to sever Russian ties.
Justified as they may be, such measures might be painful in the shorter term for some. BP’s shares lost ground on the back of its announcement and the financial blow of the Rosneft exit could be felt for some time to come.
And the issue is not restricted to oil majors. Mining companies such as Glencore also have exposure to Russia through various investments.
For UK equity income funds and other investors reliant on the energy and mining sectors for yield, this may be an unwelcome bump in the road.
With prices soaring, the energy sector still looks primed for further hefty returns. But this is just one example of the Ukraine crisis accelerating broader trends. The due diligence, it seems, does not stop with emerging market portfolios.