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February 24, 2011 at 11:10 AM
Thursday was a busy day in the ETF world. Russell Investments and Research Affiliates announced the launch of an index series to provide a "cost-effective alternative" to active management for investors who want access to non-capitalization-weighted products.
“We are excited to merge our benchmark index design expertise with Research Affiliates’ notable research and product knowledge to create the innovative Russell Fundamental Index Series,” said Ron Bundy, managing director for Russell Indexes, in a press release. "For investors seeking an active investment approach, these new indexes will offer much sought-after alternative beta exposures with the transparency, objectivity and broad diversification they have come to expect from the Russell Index family.”
The Russell Fundamental Index Series comprises 24 indices. Russell Investments and Research Affiliates partnered in 2010 to begin working on the indices.
The series will be based on Research Affiliates' Fundamental Index methodology, which selects and weights constituents based on a company’s adjusted sales, retained operating cash flow, and average dividends paid plus share buybacks, instead of market capitalization.
“Fundamental Index strategies have moved into the mainstream,” said Rob Arnott (left), chairman and CEO of Research Affiliates, in a press release. “Major investors around the world are adding these strategies to improve portfolio efficiency and diversify their core equity portfolios."
Also on Thursday, ETF Securities announced its physical palladium fund (PALL) broke the $1 billion mark as of Feb. 16. Total assets under management for the company's seven ETFs are nearly $4 billion.
