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Life Health > Annuities > Variable Annuities

Fund Managers Explain the Russia-Ukraine War

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What You Need to Know

  • BlackRock notes that possible threats include cyberattacks and espionage.
  • TIAA-CREF says the conflict could affect the attractiveness of other European markets.
  • Transamerica warns that the effects of the conflict could be profound.

Managers of the funds used in variable annuity and variable life investment menus are starting to give investors warnings about the possible effects of Russia’s conflict with Ukraine on fund portfolios.

The funds involved are only a small part of their parent companies’ operations, and the funds have only a small portion of their assets in Russia and other countries in Eastern Europe, but the disclosures show how the funds and their advisors are sizing up the situation.


Transamerica mentions the topic briefly in a registration statement for the Transamerica Series Trust, in a section on the risks associated with investments in Europe.

“Ukraine has experienced ongoing military conflicts; this conflict may expand, and military conflicts could potentially occur elsewhere in Europe,” the company says. “The ultimate effects of these events and other sociopolitical or geopolitical issues are not known but could profoundly affect global economies and markets.”


TIAA-CREF talks about the situation in a new statement of additional information filing.

“Eastern European markets are particularly sensitive to social, political, economic, and currency events in Russia and may suffer heavy losses as a result of their trading and investment links to the Russian economy and currency,” the company says in the filing.

“Russia also may attempt to assert its influence in the region through economic or even military measures,” TIAA-CREF adds. “As a result of events involving Ukraine and Russia, the United States and other countries have imposed economic sanctions on certain Russian individuals and financial institutions. Eastern European markets will be significantly affected by the fiscal and monetary controls of the EMU. Changes in regulations on trade, decreasing imports or exports, changes in the exchange rate of the euro and recessions among European countries may have a significant adverse effect on the economies of other European countries including those of Eastern Europe.”


BlackRock has put out an update focusing on the risk of investments in Russia.

The update applies to funds designed to go into variable life and variable annuity products as well as to other funds.

The company notes that the Russian securities market is relatively new, that the volume of trading is limited, and that Russia lacks a central registration system for equity share registration.

The company then goes on to discuss Russia-related geopolitical risks:

In addition, Russia also may attempt to assert its influence in the region through economic or even military measures, as it did with Georgia in the summer of 2008 and the Ukraine in 2014 and 2022. Russia launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the military action, resulting sanctions and resulting future market disruptions, including declines in its stock markets and the value of the ruble against the U.S. dollar, are impossible to predict, but could be significant. Any such disruptions caused by Russian military action or other actions (including cyberattacks and espionage) or resulting actual and threatened responses to such activity, including purchasing and financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks on the Russian government, Russian companies or Russian individuals, including politicians, may impact Russia’s economy and Russian issuers of securities in which the Fund invests. Actual and threatened responses to such activity, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Russian government or Russian companies, may impact Russia’s economy and Russian issuers of securities in which the Fund invests. Actual and threatened responses to such military action may also impact the markets for certain Russian commodities, such as oil and natural gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such sectors globally.

Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”) have imposed economic sanctions, which can consist of prohibiting certain securities trades, certain private transactions in the energy sector, asset freezes and prohibition of all business, against certain Russian individuals, including politicians, and Russian corporate and banking entities. The Sanctioning Bodies, or others, could also institute broader sanctions on Russia, including banning Russia from global payments systems that facilitate cross-border payments. These sanctions, or even the threat of further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening of the ruble or other adverse consequences to the Russian economy. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Sanctions could also result in Russia taking counter measures or retaliatory actions which may further impair the value and liquidity of Russian securities.


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