NEW YORK--(BUSINESS WIRE)--Effective December 23, 2022, the Franklin FTSE Russia ETF (FLRU) has suspended the right of redemption of its shares pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission in order to permit FLRU to liquidate its portfolio.
Russia’s invasion of Ukraine has prompted a range of sanctions and other capital controls that prevent Franklin Templeton and other non-Russian investors from buying and selling Russian securities. As a result, FLRU’s current holdings of Russian equity securities cannot immediately be liquidated. Franklin Templeton cautions investors that it is expected that the liquidation of FLRU will take an extended period of time if circumstances involving Russian securities markets do not improve.
Franklin Templeton anticipates that FLRU will remain in existence until at least December 31, 2023, to allow FLRU to sell the securities, if conditions permit; FLRU may be terminated sooner if all of the Russian securities have been sold before that date (or they cease to represent valid interests in their issuers). After December 31, 2023, FLRU may be terminated at any time, at the discretion of FLRU’s Board of Trustees, even if not all of the Russian securities have been sold. Due to the uncertainty involved, there can be no assurance that shareholders would receive any liquidating distribution relating to any unsold Russian securities.
Please see FLRU’s web page for future updates about FLRU and the status of the liquidation.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 155 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has over 75 years of investment experience and approximately $1.4 trillion in assets under management as of November 30, 2022. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.
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Effective March 1, 2022, FLRU suspended new creations of its shares effective until further notice in light of ongoing issues related to Russia’s invasion of Ukraine. In addition, effective March 4, 2022, NYSE Arca, Inc., FLRU’s primary listing exchange, halted trading of FLRU. Since trading in FLRU’s shares is halted, FLRU no longer has a daily closing price, and a premium/discount to net asset value (NAV) cannot be calculated. Additionally, the value and liquidity of Russian securities experienced significant declines due to the circumstances related to the Russia-Ukraine conflict. The Russian securities markets did not open for trading on February 28, 2022, and were closed for a period of time before reopening on March 24, 2022, but significant trading limitations have remained. As a result, FLRU fair valued all Russian equity securities at $0 (as of December 21, 2022, such securities continue to be fair valued at $0). Accordingly, as of December 21, 2022, FLRU's portfolio is comprised of Russian equity securities (currently fair valued at $0 as noted above) and cash. In addition, FTSE Russell has suspended rebalancings/reconstitutions of the FTSE Russia RIC Capped Index, FLRU's underlying index, including application of the capping methodology, as well as other index policies, until further notice.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
ETF shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.
FLRU has been developed solely by Franklin Templeton. FLRU is not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the FTSE Russia RIC Capped Index vest in the relevant LSE Group company which owns the Index. FTSE® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of FLRU. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from FLRU or the suitability of the Index for the purpose to which it is being put by Franklin Templeton.
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