Russell Investments achieved its long-standing goal of becoming an ETF sponsor today with the closing of its acquisition of Reno, Nevada-based U.S. One Inc., according to a document obtained by IndexUniverse.com. Terms of the transaction weren’t disclosed.
Industry sources have said the acquisition effectively meant Russell was buying its way into the ETF business. The company has been trying to break into ETFs for the past year and a half, but has so far been unable to obtain the exemptive relief from the Securities and Exchange Commission that’s necessary to market ETFs.
U.S. One only has exemptive relief for actively managed equity and fixed-income fund-of-fund ETFs, so Russell must still obtain exemptive relief for the passive and individual active funds that it intends to launch. Russell currently has more than 30 funds in registration, including three it filed for early this month using U.S. One’s exemptive relief status. Exemptive relief filings are the first step necessary in the ETF filing process; they grant firms exemptions from the Investment Act of 1940.
The One Fund (NYSEArca: ONEF), U.S. One’s sole ETF, is a fund of funds that gives investors access to 95 percent of the world’s stock markets.
“Moving forward, Russell is now responsible for all investment advisory aspects of One Fund,” the document, a letter to U.S. One investors, said.
As of yesterday’s close, ONEF had gathered $14.42 million. The fund was rolled out in May 2010.