Russia ETFs continue plunge as the nation's stock market remains closed

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Jan van Eck explains how RSX ETF trades despite Russian stock market being closed
Jan van Eck explains how RSX ETF trades despite Russian stock market being closed

Russian stock ETFs extended their declines Tuesday as sanctions continued to pile on Russia.

The iShares MSCI Russia ETF tumbled 33.4% for its worst day since the fund's inception in 2010, and after losing 27.9% on Monday.

Meanwhile, shares of the VanEck Russia ETF (RSX) fell 19.3%, and were about 73.7% below their October high of $33.39. On Monday RSX ended its worst day since its inception in April 2007, finishing down 30.4%. It also ended the month of February down 54.9%, closing out its worst month ever.

The Russian stock market in Moscow remained closed Tuesday. It was closed Monday, though Russian ETFs continued to trade in the U.S.

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On Tuesday, BlackRock, which runs the iShares family of ETFs, issued a notice to investors announcing it's suspending the creation of new shares in the fund.

"The liquidity of Russian securities and its currency has experienced significant declines. In light of these circumstances, the iShares MSCI Russia ETF has temporarily suspended the creation of new shares until further notice," it said.

"BlackRock cautions investors that ERUS may not meet its investment objective, may experience increased tracking error, may experience significant premiums or discounts to its net asset value (NAV), and/or have bid-ask spreads wider than its historical average," it added in reference to buying shares on the secondary market.

On Tuesday, Visa and Mastercard blocked "multiple financial institutions" in Russia from their networks in response to government sanctions on Russian entities, preventing Russians from using their credit cards.

That move comes after the European Union, U.K., U.S. and Canada pledged to remove selected Russian banks from SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, thereby severing them from most of the global financial system.