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☆ This type of ETF offers portfolio income along with some complexity. How to determine if it’s right for you
▼ + stars: | 2024-02-15 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

These so-called derivative income funds — which include popular covered-call offerings such as the JPMorgan Equity Premium Income ETF (JEPI) — gathered $22 billion in flows last year , according to Morningstar. "I don't see volatility drying up, especially with where inflation is and this being an election year," said Barry Martin, portfolio manager of the Shelton Equity Income Fund (EQTIX) . "Instead of owning a covered call fund, you can buy a dividend fund that's paying 3% in dividend income," said John Rekenthaler, vice president, research at Morningstar. Be tax conscious: Derivative income funds can bring tax complexity because they can spin out income that's subject to short-term capital gains treatment. Comparison shop: Morningstar labels covered call funds and their ilk as "derivative income funds," but each offering will have its quirks, and this could affect its risk-return profile.

Persons: —, Rob Schultz, JEPI, there's, Barry Martin, EQTIX, Martin, Schultz, Ashton Lawrence, Lawrence, John Rekenthaler Organizations: JPMorgan, Shelton, Income, CFP, Mariner Wealth Advisors, Investors, Morningstar Locations: Encino , California, Greenville , South Carolina

☆ Russia has burned through almost half of the liquid reserves in its national wealth fund as it bleeds money amid the war in Ukraine
▼ + stars: | 2024-01-18 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

Read previewThe stash of liquid assets in Russia's national wealth fund has fallen over 44% since Moscow invaded Ukraine, according to a Bloomberg report of Russian finance ministry data on Wednesday. Meanwhile, the national wealth fund's total holdings tumbled 12% over the same period. The massive slump in the national wealth fund's liquid assets came as its holdings in Russian companies and in infrastructure bonds surged by 2 trillion rubles, per Bloomberg calculations. AdvertisementRussia's finance ministry also used around 3 trillion rubles from the fund to cover its budget deficit in 2023 after it doubled defense spending in the same period. Alex Isakov, an economist at Bloomberg Economics, said Russia's national wealth fund's liquid assets will last for another year or two if the country's oil export prices fall below $50 a barrel.

Persons: —, Alex Isakov Organizations: Service, Bloomberg, Business, National, Bloomberg Economics Locations: Moscow, Ukraine, Russia, Russia's, Israel

☆ Investors piled cash into money market mutual funds in 2023 — and now could see a higher tax bill
▼ + stars: | 2023-12-01 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you funneled cash into money market mutual funds in 2023 amid rising interest rates, you may have a surprise tax bill in April, experts say. Investors and institutions have piled $5.84 trillion into money market mutual funds, as of Nov. 29, according to the Investment Company Institute, and many funds are paying well over 5%. "With pennies earned in 2022 on cash assets, the tax bill was negligible," said certified financial planner Robert Schultz, senior partner at NWF Advisory Group in Encino, California. Here's whyWith yields closely tied to the federal funds rate, money market funds — different than money market deposit accounts — are mutual funds that typically invest in shorter-term, lower-credit-risk debt, such as Treasury bills. Many investors are stockpiling money into these funds due to "fear in the stock market" and many are nervous to spend cash, according to CFP Colin Day, an enrolled agent at Correct Capital in St Louis.

Persons: Robert Schultz, Colin Day Organizations: Investment Company Institute, NWF, Finance, Stanford Locations: Encino , California, St Louis

☆ Russian central bank to resume domestic FX market interventions from January
▼ + stars: | 2023-11-27 | by ( ) www.reuters.com time to read: +2 min

The central bank in August stopped buying foreign currency until the end of the year to avoid aggravating pressure on the rouble, which tumbled past 100 to the dollar in August and September. "From January 2024, the Bank of Russia is resuming operations on the domestic foreign currency market connected to replenishing and using National Wealth Fund (NWF) funds, including taking into account all operations carried out with NWF funds in 2023," the central bank said in a statement. "Therefore, from the start of 2024, the central bank will not buy foreign currency (what it did not buy in August-December), but will increase its sales," Suvorov said. The rouble did not react on Monday, continuing to hover near the more than five-month high it hit last week. The central bank conducts those operations on behalf of the finance ministry, which resumed its interventions in January after a hiatus of several months, shunning what it terms "unfriendly" Western currencies in favour of China's yuan.

Persons: Yevgeny Suvorov, Suvorov, Elena Fabrichnaya, Alexander Marrow, Mark Trevelyan Organizations: Bank of Russia, Wealth Fund, Thomson Locations: Russia, Ukraine MOSCOW, Russian

Finance Minister Anton Siluanov said Russia would return to following its budget rule in 2024, envisaging an oil price of $60 per barrel. The government was discussing budget plans for the next three years. Bloomberg News reported that Russia is also planning a huge hike in defence spending next year, swelling to 6% of GDP from 3.9% in 2023 and 2.7% in 2021. Siluanov said Russia planned to raise domestic borrowing to more than 4 trillion roubles annually to fund its deficits. Siluanov said Russia's NWF would hold 6.7 trillion roubles by end-2024, down from 13.7 trillion roubles, or 9.1% of GDP as of Sept. 1.

Persons: Vladimir Putin, Denis Manturov, Alexei Krivoruchko, Mikhail Metzel, Mikhail Mishustin, Mishustin, Anton Siluanov, Siluanov, Russia's, Vladimir Soldatkin, Darya Korsunskaya, Alexander Marrow, Mark Trevelyan Organizations: Sputnik, REUTERS Acquire, Finance, National Wealth Fund, Bloomberg News, Reuters, Thomson Locations: Izhevsk, Russia, Ukraine MOSCOW, Moscow, Ukraine

Under its budget rule, Russia sells foreign currency from its National Wealth Fund (NWF) to make up for any shortfall in revenue from oil and gas exports, or makes purchases in the event of a surplus. The central bank restarted its own separate interventions this month, selling 2.3 billion roubles' worth of foreign currency a day, something it said it would continue to do. The bank's decision means that from Thursday, daily FX sales will total 2.3 billion roubles, as opposed to net sales of 0.5 billion roubles envisaged previously. The bank said it may defer purchases within the budget rule framework to 2024. "We may see new measures to stabilise the situation on the FX market," the analysts said.

Persons: Elena Fabrichnaya, Alexander Marrow, Darya Korsunskaya, Kevin Liffey, Kirsten Donovan Organizations: of Russia, National Wealth Fund, Bank of, FX, Thomson Locations: Russia, Ukraine MOSCOW, Moscow, London

☆ How Russia is evading sanctions to keep $10 billion worth of seized Boeing and Airbus planes flying
▼ + stars: | 2023-07-31 | by ( Taylor Rains | ) www.businessinsider.com time to read: +4 min

Russia seized some 500 leased Boeing and Airbus airliners after invading Ukraine. Western sanctions against Russia have taken a toll on the country's aviation sector — forcing the country to get creative to keep its planes flying. This included closing US, EU, and other allied airspace, preventing planemakers like Boeing and Airbus from sending spare parts to Russia, and stopping countries like Turkey from refueling Russian planes. But, the illegal import schemes are not the only methods keeping Russia's airlines alive. Buying off seized jets using rainy-day moneyAn Aeroflot Boeing 777-300ER parked at the gate at Los Angeles International Airport before the war.

Persons: It's, Vladimir Putin, Denis Kabelev, lessors, Fabrizio Gandolfo, —, Igor Chalik, Russia's NWF Organizations: Boeing, Airbus, Russia, Reuters, Aeroflot, S7 Airlines, Aeroflot Boeing, Los Angeles International Airport, Getty, TASS, Wealth Fund, lessors . Leasing, Airlines, Ural Airlines, Aerotime, country's Ministry of Finance Locations: Russia, Ukraine, EU, Turkey, Iran, China, Russia's, Kremlin, lessors, Russian

☆ Economic asphyxiation puts Russia in China’s orbit
▼ + stars: | 2023-03-20 | by ( Pierre Briancon | ) www.reuters.com time to read: +7 min

Cut off from foreign markets by sanctions, Vladimir Putin’s government is at pains to finance budget deficits that would have been manageable in peacetime. The financial difficulties are pushing Russia further into the sphere of influence of China’s President Xi Jinping, who visits Moscow this week. Dipping into the fund, though, will push Moscow further into China’s financial orbit, Russian economist Alexandra Prokopenko has noted. In the short term, financial hope for Russia can only come from a significant increase in oil and gas prices. Trade between China and Russia increased by 34% last year as Chinese imports of oil and gas jumped 50%.

☆ Analysis: Russian economy holding up but the road back to prosperity may be long
▼ + stars: | 2023-02-23 | by ( Alexander Marrow | ) www.reuters.com time to read: +6 min

"The Russian economy and system of governance proved to be much stronger than the West supposed," President Vladimir Putin told Russia's political, military and business elite this week. 'GUNS NOT BUTTER'He also argued for sustainable domestic development and a self-sufficient economy, recalling a criticism levelled against Soviet leaders so focused on military spending they ignored people's welfare. But Russia is ramping up military spending, and diverting funds from hospitals and schools will ultimately hamper the development of civilian economic infrastructure. Prokopenko, who also highlighted the opportunity cost to the economy, said Russia's financial leadership had become used to navigating crises. Putin can be proud of his 'Fortress Russia' that his financial leadership built for him," she said.

☆ Russia expects Sberbank to pay dividends on 2022 profits, says TASS
▼ + stars: | 2023-02-09 | by ( ) www.reuters.com time to read: +2 min

[1/2] A view shows the logo of Sber (Sberbank) at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 15, 2022. REUTERS/Anton Vaganov/MOSCOW, Feb 9 (Reuters) - Russia's finance ministry said on Thursday it expects state-owned lender Sberbank (SBER.MM) to pay dividends of at least 50% on its 2022 profits, a prospect that drove up Sberbank shares and the wider Moscow Exchange stock index. We will discuss this further," the TASS news agency quoted Deputy Finance Minister Vladimir Kolychev as saying. Sberbank, in common with other major Russian companies, did not pay a 2021 dividend last year on the government's orders. The rouble-based MOEX index (.IMOEX) pared losses to climb 0.6% higher on the day, while Sberbank shares did the same, gaining around 1.6% by 1333 GMT and nearing a multi-month high.

Non-oil and gas revenues were 28% lower at 981 billion roubles, attributed to lower domestic VAT and income tax takings. Overall, budget revenues for the month were down 35.1%, while spending was 58.7% higher in January 2023, at 3.12 trillion roubles, already more than 10% of the full-year spending plan. January's deficit already stands at 60% of the whole year's plan of 2.93 trillion roubles and analysts expect the shortfall to widen to more than 5 trillion roubles if current conditions persist. Russia's main sources of covering the budget deficit are domestic borrowing, which it stepped up sharply in the final quarter of 2022, and its rainy day fund of accumulated energy revenues. On Monday, the ministry said the National Wealth Fund (NWF) stood at $155 billion, with 38.5 billion roubles worth of Chinese yuan and gold spent in January to cover the deficit.

Jan 26 (Reuters) - Russia's finance ministry on Thursday proposed scrapping liquidity restrictions for spending on "anti-crisis" investments from its National Wealth Fund (NWF), citing the need to support key sectors amid challenging geopolitical conditions. Russia's fiscally conservative authorities have tended to be cautious in their use of NWF funds. The ministry proposed that the total volume of such investments not exceed 4.25 trillion roubles ($61.24 billion). The NWF is Russia's sovereign wealth fund, built up through years of profits on the country's oil and gas exports. As of Feb. 1 last year, three weeks before Russia sent troops into Ukraine, the total fund stood at $174.9 billion, or 10.2% of projected GDP.

☆ Russia rainy day fund shrinks by $38 bln as government plugs deficit
▼ + stars: | 2023-01-18 | by ( ) www.reuters.com time to read: +2 min

Jan 18 (Reuters) - Russia's National Wealth Fund shrank to $148.4 billion as of Jan. 1, down $38.1 billion in a month, as the government took out cash to plug its budget deficit, data showed on Wednesday. The ministry said it had spent 2.41 trillion roubles ($35.1 billion) from the NWF, a rainy day fund that accumulates oil revenues, to cover the deficit in December. The size of the NWF at Jan. 1 was equivalent to 7.8% of Gross Domestic Product, the finance ministry said. Finance Minister Anton Siluanov said last week that Russia recorded a budget deficit of 2.3% of GDP last year, having targeted a surplus of 1% before the start of the war. According to the budget law, the finance ministry can spend another 4.2 trillion roubles, currently worth around $61 billion, over the next two years to plug the deficit.

☆ Russian rouble surges as volatile year draws to a close
▼ + stars: | 2022-12-30 | by ( ) www.reuters.com time to read: +2 min

By 0755 GMT, the rouble was 1.8% stronger against the dollar at 70.87 , recovering some ground from the eight-month low of 72.9175 hit in the previous session. The rouble has lost around 13% to the dollar since the price cap on Russian oil exports came into force on Dec. 5, although analysts have said the technical impact would be more strongly felt in January-February. It had gained 0.4% to trade at 75.58 versus the euro and firmed 2.9% against the yuan to 9.89 . Brent crude oil , a global benchmark for Russia's main export, was up 0.6% at $84.0 a barrel. The rouble-based MOEX Russian index (.IMOEX) was 0.2% lower at 2,143.5 points.

☆ Russian rouble strengthens vs dollar as volatile year ends
▼ + stars: | 2022-12-30 | by ( ) www.reuters.com time to read: +2 min

At 0708 GMT, the rouble was 1.3% stronger against the dollar at 71.22 , recovering some ground from the eight-month low of 72.9175 hit in the previous session. The rouble has lost around 13% to the dollar since the price cap on Russian oil exports came into force on Dec. 5, although analysts have said the technical impact would be more strongly felt in January-February. It had gained 0.6% to trade at 75.54 versus the euro and firmed 1.7% against the yuan to 10.01 . Brent crude oil , a global benchmark for Russia's main export, was up 0.6% at $84.0 a barrel. The rouble-based MOEX Russian index (.IMOEX) was 0.2% higher at 2,151.1 points.

☆ Permitted share of China's yuan in Russian wealth fund doubled to 60% -finmin
▼ + stars: | 2022-12-30 | by ( ) www.reuters.com time to read: +2 min

The ministry said the permitted share of gold in the NWF would also be doubled, to 40%. "The Russian finance ministry is continuing its consistent reduction of the share of currencies of 'unfriendly' states in the structure of the National Wealth Fund's assets," the ministry said in a statement. "In order to hedge exchange rate risks, we have always (replenished the NWF) in foreign currency," Siluanov said earlier this week. "From among the currencies of 'friendly' countries, the yuan has the characteristics of a reserve currency to the greatest extent, as well as sufficient liquidity in our domestic foreign exchange market," he added. The Moscow Exchange, Russia's largest bourse, said yuan-rouble trading volumes would surpass dollar-rouble trading volumes next year as financial links between Moscow and Beijing continue to intensify.

☆ Putin expects China's Xi to visit in spring, wants to boost military cooperation
▼ + stars: | 2022-12-30 | by ( ) www.reuters.com time to read: +3 min

"We are expecting you, dear Mr Chairman, dear friend, we are expecting you next spring on a state visit to Moscow," Putin told Xi. Since European countries cut links with Russia over the invasion, Russia has overtaken Saudi Arabia as China's top crude supplier. However, Xi has at times appeared cool on Russia's invasion of Ukraine. Although Xi called Putin his "dear friend", his introductory statement, at around a quarter the length of Putin's, was far more restrained in tone. Kremlin spokesman Dmitry Peskov said no date had yet been set for Xi's visit.

☆ Oil price cap may widen Russia's 2023 budget deficit, says FinMin
▼ + stars: | 2022-12-27 | by ( Darya Korsunskaya | ) www.reuters.com time to read: +2 min

Should volumes shrink, Siluanov said Russia has two sources of additional funding: the National Wealth Fund (NWF), which accumulates state reserves, and loans. Russia now expects to use just over 2 trillion roubles ($29.24 billion) from the NWF in 2022 as total spending exceeds 30 trillion roubles, more than the year's initial plan. NWF spending in December could amount to 1.5 trillion roubles. As of Dec. 1, liquid assets in the NWF totalled 7.6 trillion roubles, or 5.7% of Russia's GDP. ($1 = 68.4000 roubles)Reporting by Darya Korsunskaya; Writing by Alexander Marrow; Editing by Gerry DoyleOur Standards: The Thomson Reuters Trust Principles.

☆ Exclusive: Russia likely to buy yuan on FX market in 2023 - sources
▼ + stars: | 2022-12-22 | by ( Elena Fabrichnaya | ) www.reuters.com time to read: +4 min

"The central bank can currently now buy yuan," a banking source close to monetary authorities told Reuters. But the bank would not do so while the government continued, as now, to spend its oil and gas revenues. "(However), if next year budget revenues from the export of oil and gas exceed 8 trillion roubles, then the central bank will buy yuan," that source added. The central bank and finance ministry did not respond to requests for comment. Central Bank Governor Elvira Nabiullina last week said Russia has sufficient funds in yuan and gold.

☆ Ukraine conflict, sanctions set to blow hole in Russia's finances
▼ + stars: | 2022-11-02 | by ( Darya Korsunskaya | ) www.reuters.com time to read: +6 min

While Russia's economy initially held up relatively well to the waves of Western sanctions imposed on it, the impact is beginning to show - in analysts' assessments, if not in those of the government. Analysts at state bank VTB (VTBR.MM) forecast the gap at an even wider 4-4.5 trillion roubles. The finance ministry sees non-energy revenue, or that related to economic activity, at 11.5% of GDP in 2023, around 7% higher than this year and on par with pre-pandemic levels. The finance ministry did not reply to a Reuters request for a comment. "I very much hope that the finance ministry will avoid outright money printing."

☆ Russian finance ministry unlocks $16 bln from rainy day fund to plug government deficit
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: 1 min

Summary This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine. MOSCOW, Oct 20 (Reuters) - Russia's finance ministry on Thursday said it was drawing down 1 trillion roubles ($16.25 billion) from the country's National Wealth Fund (NWF) to help cover the government's budget deficit this year. Russia is expected to post a budget deficit of around 2% of GDP this year, as the fallout from Western sanctions and the costs of Moscow's "special military operation" in Ukraine weigh on the economy and the government's finances. ($1 = 61.52 roubles)Register now for FREE unlimited access to Reuters.com RegisterReporting by ReutersOur Standards: The Thomson Reuters Trust Principles.

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