Russell Plans 6 Actively Managed Market Cap ETFs

Seeking Alpha

By Michael Johnston:

By Stoyan Bojinov

Russell, the firm behind many of the indexes underlying popular equity exchange-traded products, recently entered the industry as an issuer. Earlier this year, Russell Investments acquired Reno-based U.S. One, and subsequently renamed the actively-managed One Fund (NYSEArca:ONEF - News) to the Russell Equity ETF. Now that the firm has actively-managed relief under its belt, Russell is taking steps to beef up its product line up with several actively-managed offerings.

In a recent SEC filing, Russel laid the the groundwork for a suite of actively managed ETFs, and based on names alone, the proposed products appear to be just “plain vanilla”. However, a closer look at the proposal reveals that these actively managed funds are actually designed to offer exposure to various investment disciplines commonly used by professional investment managers. The filing included proposals for:

  • Russell U.S. Large ETF: This fund will combine multiple active management styles into a single multi-manager portfolio. Each money manager will focus on identifying stocks within the Russell 1000 Index that they believe have the potential to outperform the index based on their unique investment approaches.
  • Russell U.S. Large Cap Growth ETF: This fund will selects stocks from the Russell 1000 Growth Index by employing a growth-style and multi-manager approach whereby investment recommendations are provided by different money managers who employ a growth investment style.
  • Russell U.S. Large Cap Value ETF: This fund will seek to provide long term capital growth by utilizing a multi-manager, value-style investment approach to select securities from the Russell 1000 Value Index that have the potential to outperform.
  • Russell U.S. All Cap ETF: This fund will select securities from the Russell 3000 Index and will employ a multi-style (value, growth and market-oriented) and multi-manager approach whereby investment recommendations are provided by different money managers who employ distinct investment styles.
  • Russell Mid Cap ETF: As the name suggests, this fund will employ a multi-style and multi-manager approach in selecting stocks from the Russell Midcap Index.
  • Russell Small Cap ETF: Similar to the offerings listed above, this ETF will employ a multi-style and multi-manager approach to focus on identifying stocks within the Russell 2500 Index that are believed to have the potential to outperform the index.

Russell Line Up

The San Francisco based issuer debuted its first ETFs in 2011, and the firm presently offers 21 products in total. Many of the funds offered are focused on delivering exposure to investment strategies within the large and small cap stock universe [see Russell Debuts Factor ETFs]. Russel Investments also currently offers a suite of “Discipline ETFs”, which are funds designed to offer exposure to various investment disciplines commonly used by professional investment managers, including:

  • Growth At A Reasonable Price ETF (NYSEArca:GRPC - News)
  • Contrarian ETF (NYSEArca:CNTR - News)
  • Equity Income ETF (NYSEArca:EQIN - News)
  • Low P/E (NYSEArca:LWPE - News)
  • Aggressive Growth ETF (NYSEArca:AGRG - News)
  • Consistent Growth ETF (NYSEArca:CONG - News)

Disclosure: No positions at time of writing.

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