• AMP currently has 0.04% holdings in Russian investments
• We have already begun exiting these investments
The Russian invasion of Ukraine is very concerning and a tragic event which will result in the loss of lives. As part of our sustainable investing philosophy of avoiding the bad and supporting the good, we believe exiting any investments in Russia is the right thing to do.
AMP only has very small exposure to Russian investments – less than 0.04% of our total funds under management. We would like this to be 0% as we don’t support this type of activity. As a result, we have placed orders to sell off those holdings.
In line with our sustainable investment philosophy, we have 0% holdings in any oil & gas extraction/exploration companies like BP and Shell that also have underlying ownership stakes in large Russian energy companies.
How does this impact our investments and KiwiSaver? Here are a few points to think about:
• Bad news and uncertainty creates volatility in markets. Volatility is healthy and normal. Without volatility and pullbacks, investors would not be rewarded for long-term gains. Focus on the long-term and keep calm as the media will be filled with concerning short term financial news stories.
• History teaches us a lot on how financial markets respond to crisis events like wars, terrorist attacks, diseases and financial shocks.
- Often the market impact is similar – an initial sharp fall followed by a rebound.
- If you look at all significant events since World War 2, the average market decline is 6%. But six months later, markets on average have been up 9% from their lows and twelve months later, up 15% from their lows.
• Trying to time the market is difficult anytime, let alone when there is so much noise. Selling or switching into more conservative funds during times of high volatility often delivers worse long-term outcomes. Some think they will switch back, but never do, or they miss the rebound and only switch back after the market has recovered.
The best approach is to keep calm and focus on the long term.