ETF investors have had to learn two unpleasant truths these days, when stock prices are swinging wildly in one direction and then in the other.

The first ugly realization is that it is possible that overnight entire countries and their companies will no longer be accessible to investors.

And the second insight is that even ETFs – a type of investment that even consumer advocates praise for its excellent tradability – can neither be bought nor sold under certain conditions.

Dennis Kremer

Editor in the “Money & More” section of the Frankfurter Allgemeine Sunday newspaper.

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Exchange traded funds (ETFs) have a tremendous track record.

Their simple principle of mapping an underlying stock market barometer one-to-one has brought them many new fans, especially in the past two years.

It works like this: If, for example, the Dax rises by two percent, the associated Dax ETF also gains two percent.

Everyone understands that, and since the ETFs are also available at significantly lower fees than classic funds, the assets under management have grown very strongly in recent times.

According to the analysis house ETFGI, investors have currently invested almost ten trillion dollars in index funds.

So far this year, however, the investment has brought little joy: the war in Ukraine is unsettling the financial markets.

There are also concerns about inflation and the fragile state of the global economy.

At this point it is important to classify these concerns correctly: of course they are nothing compared to the horror that people in Ukraine are currently experiencing.

However, it remains a new experience for many of the recently added ETF investors that the stock market prices can also fall significantly.

And that even with index funds, not every supposed security actually lasts.

Still investing in ETFs?

So are ETFs still the right choice in times of crisis?

The short answer is yes.

The long answer begins with the securities that the Ukraine war has shaken on the financial markets.

To get back to the beginning: It is unprecedented in recent financial history that investors can no longer invest in an entire country and all of its companies, as they can now in Russia.

Yes, there were state bankruptcies, yes, there were stock market closures.

But the most important index operator MSCI has never before excluded a country of this size from its indices.

It's just a good thing that Russian shares, for example, only make up around three percent of the most important barometer for emerging markets, the MSCI Emerging Markets.

However, many a concerned investor is secretly wondering what would happen if a similar fate were to befall a country with more economic power, such as China.

To put it bluntly, that would be a different story: China has a share of around 30 percent in the index.

The consequences for investors would be dramatic.

An unimaginable scenario?

Before the attack on Ukraine, many would have formulated something similar with regard to Russia.