This is the continuation from the newsletter you received from Human Investing on March 4, 2022

YOUR EXPOSURE TO RUSSIAN INVESTMENTS IS LESS THAN 1%

The invasion of Ukraine by Russia has inspired awareness for investors regarding their portfolio's exposure to Russian investments. For most diversified portfolios, the exposure to investments in Russia is less than 1%.  For those who would prefer to divest from Russia, the good news is that this number will most likely be effectively zero in the coming days. 

The intersection of an investor’s portfolios and the current conflict rests in Emerging Markets. For example, at Human Investing, an investor with a 20+ year investment time may be invested in a portfolio of 100% low-cost index funds. Our current company allocation towards Emerging Markets would be approximately 5% of their total portfolio. A common investment to fill the Emerging Market investment is the Vanguard FTSE Emerging Market Index Fund (VWO). As of January 31, 2022, this fund holds approximately 2.9% of its total holding in Russian equities. In dollar terms, an investor with $100,000 invested is likely to have approximately $5,000 invested in Emerging Markets. Of the $5,000, a total of $150 may be invested in Russian related investments. In percentage terms, this equates to less than two-tenths of one percent and will most likely drop off in the coming weeks.  

Pressure from investors and an inability to trade securities on the Russian market have driven major index providers to start removing Russia from their funds as early as next week (Vanguard). This is a welcomed announcement for investors who aim to divest on account of geopolitical risk and ethical considerations.  

We’ve Seen this Before

As we have previously shared with clients, the impact of wars on the markets is mixed. The one certainty that comes with war and the market is volatility. Volatility as measured by the VIX (a popular gauge for market turbulence, has been on the steady incline since January—this index year-to-date is up over 82%). Despite its steady increase since January, this measured volatility remains far below the gyrations stimulated by the Coronavirus Pandemic. 

Stick to your financial Plan

Investors and savers should continue to focus on their financial plan and subsequent asset allocation. In anticipation of ongoing tensions and additional volatility, a regular evaluation of cash and cash-flow is warranted. Are there needs on the horizon that are not currently accounted for in your plan or current cash position? Or is your financial life the same, but you are generally on edge about the war and its potential impact on the markets? Regardless of how you may respond to these questions, we are here to help and talk with you about your portfolio, the markets, or anything else that is on your mind related to your finances. Thank you for allowing us to serve you as we pursue our mission together— to faithfully serve the financial pursuits of all people. 

If you have any questions, please email hi@humaninvesting.com.