BlackRock Fund Takes Major Loss 

Hedge Fund BlackRock saw the invasion of Russia on Ukraine as a good time to take a risk on the country’s stocks. BlackRocks’s Emerging Frontiers Fund is now seeing the repercussions of that move. The fund is now down over 10%. The Fund was managing roughly $960 million but is now down more than it’s ever been in the last ten years since it started. 

In the beginning of February, BlackRock had one of its largest long bets on Russia, with 9% of its assets invested in Russian shares. The leader of the team that manages the Emerging Frontiers Fund, Sam Vecht, says that when the Russians first invaded Ukraine, they raised their bet further. With such unprecedented times it’s hard to always have the right answer to investment strategies — as we know, no reward comes without a risk. However, since the loss, the fund has since withdrawn all Russian positions. 

Are Hedge Funds Over Leveraged?

This news of BlackRock is alarming as is other recent news with various hedge funds confirming massive losses. Melvin Capital, another large hedge fund, was hit hard last year with a series of short bets last year on popular meme stocks AMC and GameStop. The New-York based Hedge fund had a difficult time recovering from its 2021 losses and was named “The Worst Performing” hedge fund of 2021 by Bloomberg. The recent news of major losses  hedge funds are experiencing continue to raise concern on their ability to properly and safely manage the funds. 

Top 10 Stock Funds with Largest Russia Exposure


Should you Invest in Russian Stocks?

While the dip in the Russian market may sound tempting to buy into, the increasing financial sanctions imposed on Russia continue to deplete whatever is left of the market and is creating a very uncertain future. The Ruble (Russia’s currency) has lost nearly 50% of its value since the war of Russia and Ukraine started just a few weeks ago. Additionally the Russian stock market remains entirely closed due to the volatility. 

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