Russell Plans 6 Active US Equity ETFs
October 25, 2011
Russell Investments filed regulatory paperwork with the Securities and Exchange Commission to market six actively managed ETFs that target U.S. equities that are divided along size and style parameters, making tangible its stated aim to stake a claim in the transparent active ETF space.
The six funds are:
The planned ETFs are the latest sign that the Seattle-based company is indeed staking its future in the ETF industry, in part, on actively managed strategies. The company has also said it intends to be a leader in the relatively new world of intelligent beta indexed funds, and it has indeed rolled out a number of funds with indexes that screen securities for variables like volatility or beta.
Whether Russell has success with its active strategies remains is an open question. While many industry sources say the active ETF space is on the verge of taking off, the numbers so far aren’t terribly encouraging. As of Oct. 20, a total of $5 billion was invested in 40 active ETFs, according to data compiled by IndexUniverse. That’s a tiny percentage of the $1.019 trillion that is invested in all 1,342 U.S. ETFs.
The lead portfolio manager for all six funds is Robert Kuharic, who has been in various money management activities at Russell since 2005. The funds will also make use of the multimanager approach Russell is known for on its active mutual funds.
The additional managers will be unaffiliated and given the discretion to utilize a variety of investing styles, including ones focusing on growth, value and/or market-oriented, according to the filing. The funds are further diversified with a variety of equity “substyles.”
Russell didn’t specify expense ratios or ticker symbol for its new funds.
It did say that the funds also may invest a portion of their assets into real estate investment trusts, which would create additional expenses for investors in addition to the typical fund fees.
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