Russell Files For More ETFs Using US One

February 28, 2011

Russell Investments, making use of its recent acquisition of U.S. One, filed with regulators using its new unit’s exemptive relief status to launch 18 ETFs based on Russell indexes. The filing covers a range of strategies and exposures, and includes funds it previously filed for as well as five others.

Russell has been looking to get into the ETF market for years, but has struggled to gain the exemptive relief from the Securities and Exchange Commission required to do so. Its acquisition of U.S. One Trust, which closed last week, was widely seen in the ETF industry as a Russell move to fast-track its ETF ambitions.

The entry of Russell Investments into the ETF world would mark the first time a major index provider has launched ETFs of their own. ETF industry sources have told IndexUniverse.com that this may be one of the reasons Russell has had difficulty obtaining SEC approval to launch ETFs. The firm says that as of the end of 2010, it had more institutional assets indexed to equities than any other provider worldwide.

The planned ETFs in Russell’s latest SEC filing that use U.S. One Trust as registrant target a range of size and style categories based on Russell’s large- and small-cap indexes, the Russell 1000 and the Russell 2000, respectively. Several of the proposed funds stray from the beaten path stylistically, targeting equity strategies such as high beta, growth at a reasonable price, and defensive value. The five new proposed funds offer beta and volatility strategies on the Russell 2000.

The filings didn’t include proposed expense ratios, and included only a partial list of proposed tickers.

The newly identified funds Russell hopes to launch, and that don’t yet have tickers or expense ratios are:

  • Russell 2000 Low Beta ETF
  • Russell 2000 High Beta ETF
  • Russell 2000 Low Volatility ETF
  • Russell 2000 High Volatility ETF
  • Russell 2000 High Momentum ETF

 

The 13 funds that were described previously and that the company is putting into registration anew are:

  • Russell Aggressive Growth ETF (NYSEArca: AGRG)
  • Russell Consistent Growth ETF (NYSEArca: CONG)
  • Russell Growth at a Reasonable Price ETF (NYSEArca: GRPC)
  • Russell Contrarian ETF (NYSEArca: CONTR)
  • Russell Equity Income ETF (NYSEArca: EQIN)
  • Russell Low P/E ETF (NYSEArca: LWPE)
  • Russell Small & Mid Cap Defensive Value ETF, no ticker yet named
  • Russell Small Cap Defensive Value ETF, no ticker yet named
  • Russell 1000 Low Beta ETF (NYSEArca: LBTA)
  • Russell 1000 High Beta ETF (NYSEArca: HBTA)
  • Russell 1000 Low Volatility ETF (NYSEArca: LVOL)
  • Russell 1000 High Volatility ETF (NYSEArca: HVOL)
  • Russell 1000 High Momentum ETF (NYSEArca: HMTM)

 

Exemptive relief grants money managers exception to sections of the Investment Act of 1940, and obtaining it is the first step in the path to launching ETFs. It typically takes at least six to 12 months from the date of the initial filing for exemptive relief for a company’s first ETFs to hit the market.

 

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