Latest news PSS investments in Russia

Updated 28 April 2022

The scheme’s directors have been in close contact with our investment manager Mercer since Russia’s invasion of Ukraine in February.

As you know, the war has added significantly to recent market volatility. Russia is a major energy provider and international sanctions have seen global oil and gas prices rise markedly. These price movements, if sustained, will flow through to rising inflation and slower economic growth. These sanctions have also seen a sharp decline in the value of Russian assets.

PSS assets are invested through Mercer Investment Trust New Zealand by a range of managers chosen by Mercer. Mercer has sought and received assurance that those managers are complying fully with the wide range of sanctions that have been implemented globally since the war began.   

The scheme’s exposure to Russian assets is minimal. At 2 March 2022, investments in Russian securities represented just 0.03% of the scheme’s total assets. Holdings range from 0% in the Cash option to 0.05% in the High Growth option. The value of these assets and, therefore, their proportion to total assets will have reduced as prices have fallen.

Most of this small exposure is held in a portfolio of emerging market assets. Mercer follows the Morgan Stanley Composite Index (MSCI) benchmark for emerging markets, of which Russia has been a component.[1] Russia has been removed from the MSCI benchmark index which means further investment in this market is unlikely for the foreseeable future.

We will continue to monitor the situation to ensure PSS investments are invested in a manner consistent with international sanctions adopted against Russia.

 

 

 

 

 



[1] An index is a basket of securities that measures the performance of a particular market, in this case shares from companies in emerging markets. Active managers like Mercer use indices as a benchmark to measure fund performance.