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EM ETFs in ‘uncharted waters’ after Russian stock trading halts

“We’re going to build some things up as we go and we’re really in unknown waters here,” he said.

Johnson said this development could have wide-ranging consequences for economies like China. Despite the wave of economic penalties imposed by other countries, China stands with Russia, insisting that discussions should attempt to resolve the issue in Ukraine.

According to Johnson, many index and ETF providers currently offer funds for developing markets that do not include Chinese stocks. He cited WisdomTree’s Emerging Markets Ex-State-Owned Enterprises Fund and the Freedom 100 Emerging Markets ETF (FRDM), which selects its holdings based on the grading method for Human and Economic Freedom (XSOE).

All five Russia ETFs listed in the United States have ceased trading due to “regulatory concern”. This includes the NYSE-listed Direxion Daily Russia Bull 2X Shares ETF (RUSL), for which trading was halted last Friday.

“This particular action, I think, is a wake-up call for investors,” Rudy Mazza, whose firm runs the Direxion ETF, told CNBC.

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