Russian invasion of Ukraine

March 18 | 4 min read

The Russian invasion of Ukraine has been a focus of investment markets over recent weeks. The invasion is a humanitarian tragedy and a major geopolitical event. Western countries have been swift to condemn Russia but have thus far avoided direct military conflict. Instead, the United States, the European Union and some of their allies have opted to impose significant economic sanctions on Russia. The sanctions will likely result in an extremely deep recession and high inflation in Russia.

The impact of the Russian invasion on the rest of the world is likely to be higher commodity prices, moderately higher inflation and moderately weaker growth but will depend on factors such as the length and breadth of the conflict. Outside of Russia and Ukraine, the impact will be greatest on European countries and companies. Our central case is that the invasion will not derail the global recovery with reasonable growth likely this year.


Some of the sanctions recently imposed on Russia include:

  • Not allowing Russia’s central bank to access some of its foreign reserves, which are in aggregate worth around USD600bln.
  • Removing select Russian banks from the Swift system (a financial messaging system). This action will make it more difficult for Russia to transfer money internationally.
  • Revoking its “most favoured nation” trading status, which can lead to higher tariffs on Russian exports.

Many global companies have also responded to the Russian invasion by suspending or reducing Russian operations. Government sanctions along with the responses of companies have resulted in the Russian Rouble collapsing and the Russian stock exchange falling sharply before trading was suspended. Russian citizens have rushed to withdraw cash in foreign currency. In response to the falling Rouble, the Russian government has raised its policy interest rate to 20% as shown in the chart below.



Although Russia and Ukraine are relatively small economies, they contribute significantly to a range of important commodity markets. Some examples include:

  • Energy: Russia is the third-largest oil producer and largest exporter. It supplies about a quarter of the EU’s oil imported. The EU also relies on Russia for around 40% of its natural gas.
  • Food: Russia and Ukraine are major exporters of wheat, barley, corn, and sunflower oil.
  • Materials: Russia and Ukraine produce many materials such as nickel, copper, iron, neon, palladium and platinum. These are used across a wide range of industries. For example, manufacturing, building, mobile phones and microchips.



As shown in Chart 2, energy prices have spiked since the invasion. With an already high inflation rate, the world has been reluctant to impose energy-related sanctions. Nevertheless, given energy exports provide Russia access to foreign currency, this stance is changing. The US has recently banned all imports of Russian oil and gas, whereas the UK and the EU have pledged to phase out or reduce reliance on Russian energy by the end of 2022. The EU is the economic zone which is most dependent on Russian energy supplies.

Vision Super’s Russian Exposure

We are monitoring the situation in the Ukraine closely. The Fund currently holds one Russian asset (a government bond) that has a zero valuation. We have recently considered the investability of Russian assets. Reflecting this, we are asking our managers to not make any new Russian investments until further notice. This is within the context of our overriding regulatory requirement to act in the members’ best financial interest.


This information is general advice which does not take into account your personal financial objectives, situation or needs. Before making a decision about Vision Super, you should think about your financial requirements and consider the relevant Product Disclosure Statement and Target Market Determination issued by Vision Super Pty Ltd ABN 50 082 924 561 AFSL 225054 at

March 18 |  4 min read

Must Reads

Feature, Investments, must read  |  4 min read

Rising Interest Rates

For the first time since November 2010, the Reserve Bank of Australia (RBA) increased the cash rate at its May 2022 meeting.

General, Investments, must read  |  3 min

Investment Update – March 2022

After strong gains through much of 2021, global equity markets fell moderately during the March quarter but the Australian share market outperformed and rose moderately.

Feature, Fund news, Investments, must read  |  8 min read

US Inflation

It has been over a year since COVID-19 ended one of the longest equity bull markets in US history. Governments and central banks responded quickly and, as a result, global equity markets have not only recovered but some have hit record highs.

Feature, Fund news, Investments, must read  |  2 min read

Investment update March 2021

Auction clearance rates have recently reached elevated levels and this has coincided with very strong growth in house prices across Australian capital cities.

Build a better future for you and your family

Invest in your future self

Sustainable products, quality advice, education and of course, low fees.

You have options when it comes to saving in your super and drawing from it on retirement. Find out which of our retirement products is most suited to you.

The Latest

General  |  7 minutes

What happens to my defined benefit (DB) when I reach the following milestones?

Attain 40 years of DB scheme membership, or reach age 65 – whichever comes first.

General  |  3 minutes

Russia’s cyber war

And its effect on Australia

General  |  5 minutes

Changes coming to super on 1 July 2022

From 1 July this year, there are a number of changes coming that may affect your super. The superannuation guarantee (SG) $450 earnings threshold, work test, First Super Saver Scheme and the way downsizer contributions can be made will all be different

Already a Vision Super member?

The great news is you can now open your pension account online through the secure site.

Not a Vision Super member?

You’ll just need to open a Vision Personal account first and then you can transfer across to a Vision Super pension.