How The Collapse Of The Russian Ruble Could Impact Your Portfolio

Zinger Key Points
  • According to FactSet, S&P 500 companies generate only about 1% of their total revenue from Russia and Ukraine, suggesting S&P 500 index funds like he popular SDPR S&P 500 ETF Trust are seeing extremely limited impact from the Russian conflict.
  • Investors who hold emerging markets ETFs have a small amount of exposure to Russia.

The Russian ruble was trading as low as 119 per U.S. dollar on Monday morning, down from 84 per dollar on Sunday, a decline of nearly 30%. The precipitous fall of Russia's currency comes in response to international backlash and sanctions against Russia following its invasion of Ukraine last week.

Russia's central bank announced on Monday that its stock and derivatives markets will remain closed on Monday, but plenty of Russia-linked stocks and ETFs are taking big hits in global markets on Monday.

Related Link: Gas Prices: Why Russia's Invasion Of Ukraine Will Increase Your Costs At The Pump

RSX And SPY Funds: One of biggest victims is understandably the VanEck Russia ETF RSX, which was down 22.4% on Monday morning. The RSX ETF is exposed specifically to Russia, so investors should understand how much of an impact the turmoil in Russia will have on their investment. But other popular ETFs also have a limited amount of exposure to Russia.

According to FactSet, S&P 500 companies generate only about 1% of their total revenue from Russia and Ukraine, suggesting S&P 500 index funds like he popular SDPR S&P 500 ETF Trust SPY are seeing extremely limited impact from the Russian conflict. Among S&P 500 companies, Philip Morris International Inc. PM generates the highest percentage of revenue from Russia and Ukraine at 8%.

PepsiCo, Inc. PEP and Mohawk Industries, Inc. MHK are a distant second and third at under 4.5% of revenue each.

Other Russia-Exposed Funds: Investors who hold emerging markets ETFs have a small amount of exposure to Russia. About 2.7% of the popular Vanguard FTSE Emerging Markets ETF VWO stock holdings are Russian stocks, while 2% of iShares Core MSCI Emerging Markets ETF IEMG holdings are Russian. The WisdomTree Emerging Markets High Dividend Fund DEM has a particularly high exposure to Russian stocks at 6.3%.

A handful of other thematic ETFs have small exposure to Russia. The iShares MSCI Global Metals & Mining Producers ETF PICK fund has 2.4% exposure to Russia. The Amplify Lithium & Battery Technology ETF BATT fund has 2.2% exposure.

In addition, several Russian stocks that trade directly on major U.S. stock exchanges have now been halted, including Yandex NV YNDX, QIWI PLC QIWI, Mechel PAO MTL, Ozon Holdings PLC OZON, HeadHunter Group PLC HHR and Nexters Inc GDEV.

Benzinga's Take: Despite the recent volatility in the U.S. market, most American investors are extremely insulated from direct investment in Russia or the Russian economy. In the last five days, the RSX fund is down a staggering 42%, while the SPY fund is actually up 0.5%.

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