Russell Rolls Out 10 Factor-Based ETFs

By
ETF.com Staff
May 31, 2011
Share:

Russell makes its second move into the world of ETFs in as many weeks.

 

Russell Investments, which finally launched the first of its own exchange-traded funds earlier this month, rolled out 10 more ETFS today. These “factor-based” funds are built on the Russell 1000 and Russell 2000 indexes and isolate beta, volatility and momentum.

The rollout brings to 16 the number of ETFs the Seattle-based firm now has on the market, including the six “investment discipline” ETFs it brought to market on May 19. Today’s launch is the latest phase of the company’s plan to introduce what it called “smart” or “intelligent beta” ETF products that go beyond the market-capitalization-weighted funds that constitute most the $1.1 trillion in assets now in U.S.-listed exchange-traded products.

The new products and their expense ratios are:

  • Russell 1000 High Beta ETF (NYSEArca: HBTA), 0.49 percent
  • Russell 1000 Low Beta ETF (NYSEArca: LBTA), 0.49 percent
  • Russell 1000 High Volatility ETF (NYSEArca: HVOL), 0.49 percent
  • Russell 1000 Low Volatility ETF (NYSEArca: LVOL), 0.49 percent
  • Russell 1000 High Momentum ETF (NYSEArca: HMTM), 0.49 percent

 

  • Russell 2000 High Beta ETF (NYSEArca: SHBT), 0.69 percent
  • Russell 2000 Low Beta ETF (NYSEArca: SLBT), 0.69 percent
  • Russell 2000 High Volatility ETF (NYSEArca: SHVY), 0.69 percent
  • Russell 2000 Low Volatility ETF (NYSEArca: SLVY), 0.69 percent
  • Russell 2000 High Momentum ETF (NYSEArca: SHMO), 0.69 percent

 

“We’re not trying to be a me-too provider,” Greg Friedman, managing director of Russell’s global ETF product group, said in a telephone interview.

“We’re trying to add either complimentary products into the market or ones that that add new exposures into the marketplace that we know sophisticated investors want,” he added, stressing that the factor-based products exactly fit that bill.

The new factor-based products are based on Russell-Axioma Factor indexes that use a formal risk modeling process to help neutralize other factor exposures in order to manage turnover in the portfolio, the company said in a press release.

The indexes are reconstituted monthly to maintain their focus on the respective specific factor.

While the investment discipline ETFs Russell rolled out about two weeks ago are designed more with retail investors in mind, the factor-based funds are targeting more sophisticated investors who have been pursuing such strategies, but without the convenience of an ETF wrapper, Friedman said.

He said the new ETFs amount to a “fairly priced” option for investors to gain exposure that previously was much more logistically difficult to achieve.

The new ETFs and their specific strategies are in the table below.

 

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

Russell 2000 ETF 'IWM' faced another wave of redemptions exceeding $1.2 billion Friday, July 24, or nearly 5 percent of its total assets under management. U.S.-listed ETF assets slipped to $2.123 trillion.

'SPY' paced State Street's issuer-leading inflows Friday, July 24. On the flip side, massive outflows from 'IWM' put iShares at the top of the day's redemptions.

ETF.COM ANALYST BLOGS

By Dave Nadig

With the China A-Share market half-broken, ETF investors should be very, very cautious.

By Drew Voros

Price depreciation and continued outflows have made for a tough few years.

By Dave Nadig

Legendary investor trips over how ETFs work.

By Dave Nadig

With China ETFs hot … until recently … how much is your portfolio actually affected by the Chinese intervention?

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

A more in-depth look at the smart-beta survey's results.

By Invesco PowerShares

Smart beta appears to be poised for further growth.

By Dorsey Wright & Associates LLC

So many sectors, how do you choose? A quick guide from Dorsey Wright.