Rebalanced U.S. equity allocations of many portfolios reflect
Investments announced today several enhancements to its multi-asset
portfolios and retail product offerings in the U.S. market, responding
to challenges facing investors and their financial advisors in finding
greater diversification and long-term, return-seeking investment
strategies amid rapidly evolving global markets.
“We’ve marshaled the best of Russell’s multi-asset capabilities to serve
our advisor clients with enhanced solutions for investor portfolios,”
said Sandy Cavanaugh, CEO of Russell’s U.S. advisor-sold business. “I’m
particularly excited about our innovative solution for investors who
seek exposure to institutional-quality alternative investments with a
new offering that features all of the mechanics, transparency and
liquidity of a mutual fund, both as a stand-alone product and
incorporated within our multi-asset portfolios.”
Today’s announcement includes the launch of two new funds - the Russell
Multi-Strategy Alternative Fund and the Russell
U.S. Strategic Equity Fund - and updates to the U.S. equity
allocation of many Russell portfolios. These reallocations included
changing the investment strategies, names and benchmarks of the Russell
U.S. Growth Fund and the Russell U.S. Quantitative Equity Fund to
incorporate insights based on the Russell
Stability Indexes style-based benchmarks. The Russell U.S.
Quantitative Equity Fund was renamed the Russell U.S. Defensive Equity
Fund and the Russell U.S. Growth Fund was renamed the Russell U.S.
Dynamic Equity Fund.
The launch of the Russell Multi-Strategy Alternative Fund and the
Russell U.S. Strategic Equity Fund build on Russell’s more than four
decades of institutional experience and long-standing commitment to
global investing. The launch of these funds also underscores the firm’s
ongoing exploration of new areas of opportunities based on its capital
“With the global economy continuing to dramatically evolve, we believe
there’s an ongoing need to identify and capitalize on market shifts both
in terms of evaluating the increasing number of investment strategies
available and in assessing the opportunities that can arise in volatile
markets,” said Phill Rogerson, managing director of Consulting and
Product Development for Russell’s U.S. advisor-sold business. “The
current market environment provides us with an opening to think
differently about managing risks and to seek to be more agile in
responding to opportunities.”
Russell Multi-Strategy Alternative Fund overview
Through the Russell Multi-Strategy Alternative Fund, investors can gain
access to a diverse range of alternative investment strategies and
sub-strategies drawing on a broad range of instruments, markets and
asset classes economically tied to U.S., foreign and emerging markets.
The Fund seeks to achieve long-term capital growth with low correlation
to, and lower volatility than, global equity markets. Consistent with
Russell’s multi-asset investment approach, the Fund brings together
several investment managers not typically available to retail mutual
fund investors with experience in alternative strategy investing for
institutional investors. Each employs their own unique investment style
separately with allocations determined by the Fund’s portfolio manager.
The Russell Multi-Strategy Alternative Fund is designed to diversify
risks of investing in alternatives, and combines four strategies with a
range of risk/return profiles that have historically low correlation to
each other, many of which also are not typically available to retail
mutual fund investors. These strategies include relative value, event
driven, equity hedge and tactical trading.
The Russell Multi-Strategy Alternative Fund’s benchmark is the Barclays
U.S. 1-3 Month Treasury Bill Index.
Russell U.S. Strategic Equity Fund overview
The Russell U.S. Strategic Equity Fund is an open-ended mutual fund
employing a multi-asset approach to gain exposure to U.S. large and
medium capitalization companies. It seeks to provide long-term capital
growth, and will initially feature 10 manager assignments, representing
five investment styles – defensive, dynamic, growth, value and
market-oriented – and multiple sub-styles.
The portfolio manager has the ability to tactically tilt the Fund’s
exposure by over- or under-weighting any of the investment styles based
on factors such as changes in interest rates, monetary policy, etc.
Through the ability to implement shifts in the Fund’s investment style
exposures by changing the Fund’s money manager allocations, the Fund
will seek to better manage market risks and opportunities based on
factors such as Russell’s outlook for the economy and capital markets.
The Russell U.S. Strategic Equity Fund’s benchmark is the Russell 1000®
Russell U.S. Defensive Equity Fund and Russell U.S. Dynamic Equity
The Russell U.S. Dynamic Equity Fund, previously the Russell U.S. Growth
Fund, has changed its investment strategy from investing in growth
stocks to a dynamic style of investing, and may implement a limited
long-short strategy. The Fund’s benchmark will change from the Russell
1000® Growth Index to the Russell 1000® Dynamic Index™.
Additionally, the Russell U.S. Defensive Equity Fund, previously the
Russell U.S. Quantitative Equity Fund, will change its investment
strategy from a quantitative investment approach to a defensive style of
investing and discontinue the limited long-short strategy. The Fund’s
benchmark will change from the Russell 1000® Index to the Russell 1000®
The Russell 1000 Dynamic and Russell 1000 Defensive Indexes are part of
Russell’s innovative family of Stability Indexes, and they represent
distinctly different parts of the market based on sensitivity to
economic cycles, credit cycles and market volatility:
“Over the years we have continued to see the benefits of the
growth/value framework, but we’ve also identified other factors that
could help us more accurately explain and understand market behavior,”
said Rogerson. “We believe that incorporating defensive and dynamic
styles can help provide more complete insights into market behavior and
manager investment styles.”
Risk management and agile investing via multi-asset investment
These recent developments follow in the vein of similar launches and
confirm Russell’s long-term commitment to global investing; including
funds launched or changed to a global mandate over the past five years,
such as the Russell
Global Real Estate Securities Fund, Russell
Global Opportunistic Credit Fund, Russell
Global Infrastructure Fund and Russell
Commodity Strategies Fund. Russell also recently introduced
enhancements to the Russell
Strategic Bond Fund to increase diversification and incorporate
potential new sources of return in the form of dedicated currency and
“The portfolio enhancements announced today, including the two new funds
and the rebalance of our existing U.S. equity allocations, are a
continuation of Russell’s history of providing multi-asset, turnkey
solutions to advisors and their clients that reflect our best insights
and views on capital market developments,” said Rogerson. “We believe
they deliver institutional-quality investment processes to the
individual investor, providing new ways for financial advisors to pursue
outcomes that can consistently create financial security for their
About Russell Investments
Russell Investments (Russell) is a global asset manager and one of only
a few firms that offer actively managed multi-asset portfolios and
services that include advice, investments and implementation. Working
with institutional investors, financial advisors and individuals,
Russell's core capabilities extend across capital markets insights,
manager research, Indexes, portfolio implementation and portfolio
Russell has about $152 billion in assets under management (as of
6/30/2012) and works with 2,400 institutional clients, more than 580
independent distribution partners and advisors, and individual investors
globally. As a consultant to some of the largest pools of capital in the
world, Russell has $2.4 trillion in assets under advisement (as of
12/31/11). It has four decades of experience researching and selecting
investment managers and meets annually with more than 2,200 managers
around the world. Russell traded more than $1.5 trillion in 2011 through
its implementation services business. Russell calculates more than
80,000 benchmarks daily covering 98% of the investable market globally,
85 countries and more than 10,000 securities. Approximately $3.9
trillion in assets are benchmarked to the Russell Indexes.
Russell is headquartered in Seattle, Washington, USA, Russell has
offices around the world including Amsterdam, Auckland, Chicago,
Frankfurt, London, Melbourne, Milan, New York, Paris, San Francisco,
Seoul, Singapore, Sydney, Tokyo and Toronto. For more information about
how Russell helps to improve financial security for people, visit www.russell.com
or follow us@Russell_News.
Fund objectives, risks, charges and expenses should be carefully
considered before investing. A summary prospectus, if available, or a
prospectus containing this and other important information can be
obtained by calling 800-787-7354 or by visiting www.russell.com.
Please read a prospectus carefully before investing.
Please remember that all investments carry some level of risk, including
the potential loss of principal invested. They do not typically grow at
an even rate of return and may experience negative growth. As with any
type of portfolio structuring, attempting to reduce risk and increase
return could, at certain times, unintentionally reduce returns.
New funds do not have an operating history, which may result in
additional risk. There can be no assurance that a fund will grow to an
economically viable size, in which case the fund may cease operations.
In such an event, investors may be required to liquidate or transfer
their investments at an inopportune time.
The Russell Multi-Strategy Alternative Fund is classified as a
"non-diversified fund" under the 1940 Act which means that a relatively
high percentage of the fund's assets may be invested in a limited number
of issuers. Thus, the fund may be more susceptible to adverse
developments affecting any single issuer held in its portfolio, and may
be more susceptible to greater losses because of these developments.
Alternative strategies are subject to risks that include, but are not
limited to: equity securities risks; derivatives risks; fixed income
securities risks; currency trading risks; risks related to commodity
investments; distressed securities risks; and non-U.S. securities risks.
Additionally, the Russell Multi-Strategy Alternative Fund will enter
into short sales and certain of the Fund’s money managers may utilize a
short-only strategy. The making of short sales exposes the Fund to the
risk of liability equal to the market value of the security that is
sold, in addition to the costs associated with establishing, maintaining
and closing out the short position.
In a limited long/short strategy, a short sale will result in a loss if
the price of the security sold short increases between the date of the
short sale and the date on which the borrowed security must be returned.
Although the Russell U.S. Dynamic Equity Fund and the Russell U.S.
Strategic Equity Fund potential for gain as a result of a short sale is
limited to the price at which it sold the security short less the cost
of borrowing the security, its potential for loss is theoretically
unlimited because there is no limit to the cost of replacing the
Defensive style emphasizes investments in equity securities of companies
that are believed to have lower than average stock price volatility,
characteristics indicating high financial quality, (which may include
lower financial leverage) and/or stable business fundamentals.
Dynamic style emphasizes investments in equity securities of companies
that are believed to be currently undergoing or are expected to undergo
positive change that will lead to stock price appreciation. Dynamic
stocks typically have higher than average stock price volatility,
characteristics indicating lower financial quality, (which may include
greater financial leverage) and/or less business stability.
Bond investors should carefully consider risks such as interest rate,
credit, repurchase and reverse repurchase transaction risks. Greater
risk, such as increased volatility, limited liquidity, prepayment,
non-payment and increased default risk, is inherent in portfolios that
invest in high yield ("junk") bonds or mortgage-backed securities,
especially mortgage-backed securities with exposure to subprime
Diversification and strategic asset allocation do not assure profit or
protect against loss in declining markets.
The Russell 1000® Index measures the performance of the large-cap
segment of the U.S. equity universe. It is a subset of the Russell 3000®
Index and includes approximately 1000 of the largest securities based on
a combination of their market cap and current index membership. The
Russell 1000 represents approximately 92% of the U.S. market.
The Russell 1000® Growth Index measures the performance of the large-cap
growth segment of the U.S. equity universe. It includes those Russell
1000 companies with higher price-to-book ratios and higher forecasted
The Russell 1000® Defensive Index is a subset of top 1000 U.S. equities
with companies that demonstrate less than average exposure to certain
risk. (lower stock price volatility, higher quality balance sheets,
stronger earnings profile).
The Russell 1000® Dynamic Index is a subset of top 1000 U.S. equities
with companies that demonstrate higher than average exposure to certain
risks. (higher stock price volatility, lower quality balance sheets,
uneven earnings profile).
The Barclays 1-3 Month U.S. Treasury Bill Index includes all publicly
issued zero-coupon U.S. Treasury Bills that have a remaining maturity of
less than 3 months and more than 1 month, are rated investment grade,
and have $250 million or more of outstanding face value. In addition,
the securities must be denominated in U.S. dollars and must be fixed
rate and non convertible.
Russell Investment Group, a Washington USA corporation, operates through
subsidiaries worldwide, including Russell Investments, and is a
subsidiary of The Northwestern Mutual Life Insurance Company.
Securities products and services offered through Russell Financial
Services, Inc., member FINRA, part of Russell Investments.
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Russell InvestmentsSteve Claiborne, firstname.lastname@example.orgElizabeth
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Source: Russell Investments