Commentary on Russia


The Russian ruble collapsed from 32.9 to the USD to 61 between year end 2013 and December 16, 2014. Our Emerging Markets Equity Strategy has been sharply underweight Russia for more than a dozen years. Currently, our exposure to Russian businesses within our EM Strategy is just two holdings with a combined weight of 1% compared to 4.4% for Russia in the MSCI EM benchmark. Both of our holdings are out of benchmark with market listings in the US and UK. 

While business conditions look set to deteriorate over the coming months and could worsen with further sanctions, we have not changed our view on the long-term growth potential in Russia for certain businesses at this point.