VanEck writes that effective December 28, 2022, VanEck Russia ETF (RSX) and VanEck Russia Small-Cap ETF (RSXJ) suspended the right of redemption of fund shares pursuant to an exemptive order issued by the Securities and Exchange Commission on December 28, 2022, in order to permit the Funds to liquidate their portfolios.
The Funds are expected to make an initial liquidating distribution to shareholders of current liquid assets, less a reserve to meet the Funds’ expected transaction costs for an extended period. That distribution is expected to occur on or about January 12, 2023.
VanEck writes that the effect of geopolitical affairs and sanctions imposed by the United States and other countries on transactions in Russian equities, and on related clearance and payment systems, have rendered a substantial number of the Funds’ positions illiquid, including many depositary receipts.
The Funds’ inability to buy, sell, and take or make delivery of Russian securities has made it impossible to manage the Funds consistent with their investment objectives, the firm says. The Funds will not engage in any business or investment activities except for the purposes of winding up their affairs. VanEck cautions investors that it is expected that the liquidation of the Funds will take an extended period of time if circumstances involving Russian securities markets do not improve.
VanEck expects that the Funds will remain in existence at least until December 31, 2023, to allow the Funds to sell the securities and depositary receipts, if conditions permit. The Funds may be terminated sooner if all of the Russian securities and depositary receipts have been sold before that date (or they cease to represent valid interests in their issuers). After December 31, 2023, the Funds may be terminated at any time on a date determined by the Board of Trustees of the Trust, even if the Russian securities and depositary receipts have not been sold, VanEck says.
