Global Markets Wrap: Russia’s Invasion Anniversary, Wobbling China ETFs

China ETFs tumbled after Yellen's warns against helping Russia.

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Reviewed by: Shubham Saharan
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Edited by: Shubham Saharan

Commodity exchange-traded funds and China-related funds have slumped, as the U.S. Treasury Secretary warned of continued economic consequences of Russia’s war in Ukraine on the one-year anniversary of the conflict.  

During an appearance at the G20 finance leaders summit in Bengaluru, India, U.S. Treasury Secretary Janet Yellen warned the world of the global impact of Russia’s aggression, including the "weaponization" of food and energy by Russia as destructive not only to Ukraine, but the entire global economy.  

"I urge the Russian officials here at the G20 to understand that their continued work for the Kremlin makes them complicit in Putin’s atrocities," Yellen said. "They bear responsibility for the lives and livelihoods being taken in Ukraine and the harm caused globally." 

Russia’s invasion has caused widespread disruption in global commodity markers, causing a sharp increase in food and energy prices. In the past year, oil prices have seesawed as Russia, one of the largest producers of oil in the world, has used the commodity as an economic weapon in the war against Ukraine, at times holding its transportation hostage.  

Meanwhile, its imposition in Ukraine has contributed to food prices soaring. Ukraine produces 10% of the world's wheat, 15% of its corn and 13% of the barley market, according to data from the European Commission While crude oil futures leaped 1.6% Friday, they are down 18% over the past year.  

One of the largest energy funds, the United States Natural Gas Fund LP (UNG), surged 5.2% Friday, according to ETF.com data.  

On the other side of the ledger, agriculture futures across the board have largely fallen. Corn futures slipped 1.5%, while wheat futures lost 4.1%. The declines have taken agriculture ETFs along for the ride, as the iShares MSCI Agriculture Producers ETF (VEGI) lost 1% and the Teucrium Agricultural Fund (TAGS) declined 2.4%.  

During her speech, Yellen also cautioned China on the implications of helping Russia.  

Shares of China-related funds subsequently dropped, with the iShares MSCI China ETF (MCHI) falling 2.8%, the SPDR S&P China ETF (GXC) shedding 3% and the Franklin FTSE China ETF (FLCH) down 3.1% on Friday, according to ETF.com data.  

 

Contact Shubham Saharanat [email protected] 

Shubham Saharan is a markets reporter at etf.com. Before joining the company, she reported for Bloomberg and the Financial Times. Saharan is a graduate of Barnard College of Columbia University.