Russell Expands Fixed Income Index Offerings

November 17, 2022

FTSE Russell, known for its equities products, is adding to its fixed income index lineup with its latest offerings as investors flock to the asset class amid a volatile market environment.  

The UK-based company’s latest products, the Russell 3000 Fixed Income Index and the Russell 1000 Fixed Income and Russell 2000 Fixed Income subindexes, will offer exposure to corporate portfolios, including high-yield and investment-grade bonds, according to a company statement. The indexes were launched on Wednesday.  

The Russell 3000 Fixed Income Index will track developments in the U.S. corporate bond market, focusing on companies found in the Russell 3000 Equity Index.  

Meanwhile, the Russell 1000 Fixed Income Index and the Russell 2000 Fixed Income Index will similarly track the corporate debt of their sister equity indexes, which Marina Mets, head of Americas, fixed income and multi-asset index product management at FTSE Russell, says will give investors “a sophisticated degree of granularity and investment precision demanded in today’s market.” 

Discourse around indices, which underpin most exchange-traded funds, and their compositions have heated up in the last few months, as providers race to develop new and improved products. Currently, 83 ETFs follow FTSE Russell indices, including the iShares Russell 1000 (IWB) and the Vanguard Russell 3000 (VTHR), according to the firm’s website.  

The launch also comes at a time when investors have sought greater exposure to fixed income vehicles, notably within investment grade and high yield bonds. Investment-grade and high-yield ETFs brought in over $11 billion in inflows in October, CFRA research shows, compared with the nearly $5 billion in net outflows from the month before. 

Still, U.S. FTSE Russell products have slumped in the last quarter amid volatile markets, recession fears and heightened geopolitical risks, with all domestic indexes ending the third quarter “flat or lower,” according to a company statement.  

 

Contact Shubham Saharan at [email protected]  

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