Russia's Wealth Fund Pours Trillions into 'Junk' Assets to Finance Military Industry

Russia's National Wealth Fund Investments

According to ХВИЛЯ: An analysis of the Russian National Wealth Fund's (NWF) investments in shares and deposits of Russian companies has revealed these assets have become illiquid, with the funds primarily being channeled to finance the military-industrial complex. Russia has funneled trillions of rubles from the NWF into financial institutions such as Sberbank, VTB, Gazprombank, and Russian Railways. Furthermore, one trillion rubles was withdrawn from the liquid portion of the NWF in 2025.

The invested capital largely went into deposits at VEB (Vnesheconombank), subordinated deposits at Sberbank, VTB, Gazprombank, and Sovcombank, and was also used to purchase preferred shares of Gazprombank. In this context, expert Yevgeny Istrebín noted that shares under wartime conditions have become

"junk" that is "needed by no one"

, emphasizing they are virtually impossible to sell. This situation reflects the severe financial isolation Russia faces due to international sanctions.

The Economic Situation

He further pointed out that the money flowing into state banks is used to finance the military-industrial complex, which is entirely dependent on state orders. According to Istrebín,

"this is all dead money that no one will ever get back"

. He also observed that once orders are reduced, defense enterprises like KamAZ could face bankruptcy, despite current military contracts, stating that

"Chinese automakers have already completely crushed the entire Russian auto industry"

.

Consequently, the National Wealth Fund's investments highlight serious risks and problems within the Russian economy that could have far-reaching consequences.

This analysis underscores that investment decisions once considered stable are now proving risky due to diminished liquidity and reliance on military procurement. Amid economic instability and international isolation, the government's subsequent steps may lead to even greater financial difficulties, impacting the future trajectory of the Russian economy.