Russia funds were once used by investors seeking exposure to one of the largest emerging markets, built on vast natural resources, low sovereign debt, and a globally significant energy sector. Prior to 2022, Russia made up a sizable portion of emerging market indexes, with funds offering exposure to major Russian equities—primarily in energy, metals, banking, and telecom sectors. These included both actively managed mutual funds and passive ETFs tracking indexes like the MSCI Russia or FTSE Russia.
Most Russia funds were concentrated in a few large-cap state-linked companies such as Gazprom, Lukoil, Rosneft, and Sberbank. The country was considered investable by global standards, though governance, sanctions risk, and currency instability were always part of the analysis.
This exposure came with high volatility, but for some, also outsized dividend yields and a commodity-linked return profile. For investors willing to accept geopolitical risk, Russia offered an accessible route to emerging market energy and industrial output.
Market disruption and fund suspension
As of early 2022, Russia’s investability for international investors changed dramatically. Following the invasion of Ukraine, the global financial system imposed sweeping sanctions against Russian entities, individuals, financial institutions, and the Russian central bank. This had an immediate and sustained impact on Russia-focused funds.
Most U.S. and European fund providers suspended purchases, redemptions, or full operations of Russia funds. ETFs such as ERUS (iShares MSCI Russia) and mutual funds with Russia-specific or broad emerging market mandates faced pricing problems, frozen assets, and delisting threats. Underlying Russian equities became inaccessible, and the Moscow Exchange restricted foreign ownership and settlement of domestic securities.
Fund NAVs stopped reflecting market prices due to frozen positions and inability to trade underlying securities. As a result, many funds were eventually closed, merged out, or repurposed to remove exposure to Russia. For investors holding Russia-focused funds at the time, mark-to-market losses were severe, and the path to recovering capital—if possible—remains uncertain.
Current fund status and options
As of now, Russia-dedicated funds are functionally unavailable to most investors in the U.S., Europe, and other major markets. Previously available ETFs have either been liquidated or remain suspended with no meaningful exposure to Russian assets. Mutual funds have restructured or written down Russian holdings to near-zero.
There is no active, liquid, and legally compliant way for retail U.S. investors to buy shares of Russia-focused funds through standard platforms. Any fund advertising exposure to Russia is either legacy (frozen or restricted), has removed Russia from its mandate, or is operating outside major regulatory frameworks.
Investors seeking indirect exposure to macro themes that once made Russia attractive—such as global energy, metals, or emerging market resource dependency—are now turning to funds that focus on markets like Brazil, the Middle East, or multinational energy firms. Direct Russia access is not considered feasible for public-market participants using regulated investment channels.
A list of available no-load international and emerging market funds without Russia exposure can be found on the main page.
Sanctions and regulatory barriers
Investing in Russian securities is now constrained by an extensive web of international sanctions. These include restrictions on trading Russian government bonds, equities of sanctioned entities, SWIFT access, and bans on providing financial services to Russian firms. U.S. and EU investors are prohibited from engaging in many types of transactions, and fund managers risk legal exposure if they attempt to circumvent those restrictions.
Additionally, capital controls inside Russia prevent foreign investors from selling, repatriating, or receiving dividends from many securities. Russian law requires local custodians to hold shares for foreign entities in special “C” accounts that are essentially frozen. Even if a fund technically still holds a position in a Russian company, it is often unable to trade, transfer, or monetize that asset.
This has forced most global funds to classify Russian assets as impaired, untradeable, or worthless until further notice. While some hedge funds or non-U.S. entities may explore workarounds in less regulated jurisdictions, retail and institutional investors operating under U.S. law do not have viable access to Russia funds at this time.
Historical lessons and fund due diligence
The Russia fund episode highlights the importance of geopolitical risk in international investing. While traditional valuation metrics, earnings growth, and resource potential attracted investors to Russia for decades, the sudden reclassification of the market as non-investable illustrates the limits of financial analysis in politically unstable contexts.
Fund due diligence going forward should include a closer review of country exposure, potential legal or geopolitical constraints, and the flexibility of the fund’s investment mandate. Many emerging market funds have updated their prospectuses to clarify exclusion of Russia or to reduce weightings in high-risk jurisdictions.
Investors considering frontier or politically complex markets should also factor in the risk of market closure, capital restrictions, or sanctions—even in countries not currently facing them. Political stability and regulatory reliability are not optional in portfolio construction when capital recovery depends on access to functional markets.
Portfolio implications
For practical purposes, Russia is no longer a component of emerging market fund allocations in most public investment products. Index providers such as MSCI and FTSE have removed Russia from their indexes. Emerging market funds that previously included 3–4% exposure to Russia have now redistributed that capital to other countries, primarily in Asia, Latin America, and the Middle East.
Investors who previously allocated to Russia funds will need to re-evaluate how to gain access to similar risk-return profiles. This may involve allocating more to global commodity producers, focusing on emerging market energy exporters, or using sector-based funds rather than geography-based ones.
Some investors have shifted toward diversified emerging market strategies that avoid single-country overweights and include strict risk controls around governance, liquidity, and regulatory access. Others have reduced exposure to politically volatile markets altogether.