Trustnet Magazine 83 April 2022 | Page 8


Stand back !

When interactive investor released its top-10 list of most bought securities in February , one trust that cropped up seemed oddly out of place . Among the usual suspects from groups such as Baillie Gifford , Vanguard and Fundsmith stood a trust that had jumped from 137th position in the preceding 12 months to seventh overall . Its name ? JPMorgan Russian Securities . With Russian troops massing on the Ukrainian border , the trust was down 20 % at one point in January , before halving this deficit by the time February rolled around . For investors who felt fears of war were overblown , this still must have seemed like an attractive entry point . Yet that pullback barely registers as a blip compared with what happened next . Russia ’ s decision to invade its neighbour saw it hit by a raft of sanctions , the MSCI Russia index went to zero , and JPMorgan Russian Securities is down by close to 80 % since the start of February . It wasn ’ t just retail investors who were stung . The managers of the ScotGems investment trust bought a position in a Russian retailer called the Fix Price Group on 24 February , the day of Russia ’ s invasion . Within a matter of weeks , the investment was written down to nil . So how can investors avoid similar catastrophic mistakes ?
The sirens ’ call Richard de Lisle , manager of the VT De Lisle America fund , says that while it is easy to scoff at anyone who tried to pick up a bargain in Russia at the start of this year , it is only with the benefit of hindsight that the decision looks so misguided : in the days running up to 24 February , the consensus was that Russian troops were stepping down from their exercises on the border . In this way , he says there is
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