The sharp fall in the FTSE 100, which is down around 3.7% and declining stock markets around the world are the inevitable consequences of uncertainty caused by Russia’s invasion of Ukraine.
Following reports that Russian forces have launched a full-scale attack on its European neighbour, in this CIO Talk Gary says “it’s inevitable that when you get a major geopolitical event like this, stocks around the world are going to give up some ground because there is so much uncertainty for everybody.”
“The one thing the market hates more than anything else is uncertainty and that’s certainly the case here.”
Although the invasion of Ukraine happened suddenly when it came, Gary said the situation “had been brewing for a while” and that Courtiers had been planning for just such an eventuality.
The independent internal Compliance Team at Courtiers, following guidance received from its Depositary and Fiduciary Trustee (Citibank UK Limited) have been working behind the scenes for the past two or three weeks. “They look at everything we do and have obviously been interested in our exposure and what risks are in the portfolio in the event of conflict breaking out in Ukraine.”
In the event, fund exposure to Russia and any associated risk has been “pretty low” with no direct holdings in Russia. Although Courtiers holds one stock, Polymetal, which gets about 40% of its revenue from Russia, this a relatively small holding.
Gary expressed his sadness for the pain that the Ukrainian people are going through and for the inevitable loss of life. What he and the Investment Team face, or have faced, is nothing in comparison.