Templeton is mulling the liquidation of a fund investing in Russia / Photo from www.franklintempletonshootout.com
The Board of Directors of one of the oldest funds that has been investing in Russia – The Templeton Russia and East European Fund – approved the liquidation and dissolution of the Fund, subject to shareholder approval, according to a leading business and financial news provider Marketwatch at www.marketwatch.com.
Based on the recommendation of the investment adviser and on other factors, including small size and declining shareholder interest in the Fund, the Board of Directors of the Fund believes that liquidation is in the best interests of the Fund and its shareholders, according to the website.
The fund was formed by a well-known investor, star developing markets manager Mark Mobius, who last week stepped down from running the Fund. Mobius has traditionally supported the idea of investing in Russia, however, stated that the western sanctions would force him to sell Russian securities.
It is anticipated that the plan of liquidation and dissolution will be submitted to shareholders for approval at the Fund's Annual Shareholders' Meeting to be held on September 24, 2015. If approved, the dissolution of the Fund will take place by the end of the year.
As of June 30, the value of assets held by the Fund amounted to $57.9 million, with Lukoil (7.4%) and Sberbank of Russia (7%) accounting for the largest share of Russian securities owned by the Fund. In addition, the Fund's portfolio includes shares in joint stock oil company Bashneft, Russia's third largest food retail company Dixy, the leading food retailer Magnit, MMC Norilsk Nickel and PhosAgro.
The Russian stock market as a whole and the collective investment industry have suffered greatly in recent years, especially since the beginning of Ukrainian conflict and anti-Russia economic sanctions, as well as due to collapse of the national currency.