JPMorgan will exclude Russia from all fixed income indexes starting March 31st, the bank announced Monday. This follows rival index providers who had removed Russian securities from their indexes following Moscow’s invasion.
JPMorgan (JPM.N) had placed Russia on an index watch on March 1, after the imposition of sanctions.
The Wall Street bank manages the widely-followed family of sovereign hard currency indexes EMBI as well as its corporate debt counterpart, CEMBI. It also runs the GBI-EM benchmark to local debt in emerging currencies, as well as the JESG index that is governed by environmental and social governance (ESG).
The bank announced Monday that Russia would be exempted from the EMBI Indexes. This includes the investment-grade sub-index and the credit bucket sub-index.
It said that Russian-currency-denominated bonds in Russia will be removed from the GBIEM indices. Accrued interest will be frozen and set at zero as of March 7.
It added that Russia and Belarus would be exempted from the JESG EMBI and JESG GBI–EM indices.
According to JPMorgan, global assets valued at $842 billion have been benchmarked against JPMorgan’s indexes. Russia is given a weighting at 0.89% in EMBIG Diversified and a weighting at 1.03% in ESG.
After sanctions were imposed following the annexation by Moscow of Crimea in 2014, Russia’s weight in emerging market indexes was severely affected. After some recovery, the weightings fell again as tensions with Ukraine escalated.
MSCI and FTSE Russell, index providers, said last week that they are taking similar steps to increase sanctions against Russia and put public pressure on the West to isolate Russia from Western investment and trade partners.