Russell Investments launched a series of factor-based ETFs to help investors better manage their exposure to U.S. equity market beta, volatility and momentum.
Amid growing interest in understanding and managing portfolio risks, Russell’s new lineup of 10 factor-based ETFs gives sophisticated institutional investors a means to “consciously manage” those risks, said Andy Arenberg, managing director of distribution for Russell’s ETF business, in an interview.
Russell’s first set of factor-based ETFs — developed in partnership with Axioma Inc., a developer of risk analysis, portfolio rebalancing and performance attribution products — are composed of:
• high-beta and low-beta large-cap U.S. equity ETFs, which track, respectively, Russell 1000 stocks with the highest and lowest predicted sensitivity to broad market movements over the next three to six months;
• high-volatility and low-volatility ETFs, which track, respectively, large-cap stocks that have exhibited the highest and lowest total return variability over the previous 60 trading days; and
• a high-momentum ETF that tracks large-cap stocks with the highest cumulative returns over the previous 250 trading days, excluding the last 20 trading days.
A second set of five ETFs covering the same factors for small-cap U.S. equities round out the series.