Russian Stocks – an update from DFA

As of February 28th, 2022, Russian equities accounted for less than 2% of the MSCI Emerging Markets index. If you want to know how much exposure you have to Russian stocks in your portfolio, here’s an easy formula:

How much do you have in stocks? Let’s say your portfolio is made of up 60% stocks and 40% bonds. Your stock (or equity) exposure = 60%. S=.60

How much of your equities are invested in non-US-based companies? Our models typically have 40% invested in international equities = 40%. I=.40

How much of your international equities are invested in emerging markets (like Russia)? Again, we’ll use our typical allocation of 33% for emerging markets = 33%. EM=.33

How much of your emerging market stocks are invested in Russian securities? As of 2/28/2022, the DFA emerging market funds held between 0.07% and 0.42%. I’ll use the highest allocation = 0.42%. R=.0042

Formula: S*I*EM*R = 0.6 * 0.4 * 0.33 * 0.0042 = 0.333%. Using a $1,000,000 portfolio as an example: $1,000,000 * 0.6 = $600,000 in stocks * 0.4 = $240,000 in international stocks * 0.33 = $79,200 in emerging market stocks * .0042 = $333.

A $1,000,000 60% equity portfolio had approximately $333 invested in Russian stocks on the last day of February 2022.

https://www.dimensional.com/us-en/insights/navigating-geopolitical-events

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.