SEATTLE--(BUSINESS WIRE)--Russell Investments announced today an innovative advance in index methodology with the launch of a new index family that reflects six investment disciplines in the U.S. large cap equity class. Each of the new Russell Investment Discipline Indexes defines and reflects a particular approach to security selection commonly practiced by professional investment managers.
“The concept of investment disciplines has evolved over the years and leverages more than 40 years of Russell’s experience researching professional investment managers,” said Rolf Agather, managing director of index research and innovation at Russell Investments. “During this time, Russell analysts have identified characteristics and preferences common among investors seeking attractive investment opportunities. Investment managers that share these common preferences have been aggregated into specific peer groups defined as investment disciplines. These new indexes represent the performance and risk of some of the most commonly used investment strategies, and they will provide additional tools to gain exposure to these strategies through index-linked investment products.”
Agather added that these new indexes are constructed using various weighting schemes, as appropriate, to accurately reflect manager behaviors typical of each specific investment discipline.
To develop the Russell Investment Discipline Indexes, Russell analysts defined the six most common approaches of professional investment managers in identifying attractive investment opportunities and categorized them into individual disciplines. The full suite of Russell Investment Discipline Indexes includes the Russell U.S. Large Cap Aggressive Growth Index, Russell U.S. Large Cap Consistent Growth Index, Russell U.S. Large Cap Growth at a Reasonable Price (GARP) Index, Russell U.S. Large Cap Equity Income Index, Russell U.S. Large Cap Low P/E Index and Russell U.S. Large Cap Contrarian Index.
Given the nature of these investment strategies, Agather added, that each index is constructed independently of the other indexes in the series. In order to reflect the return pattern of a typical manager within a specific investment discipline, the construction of each index is unique to the respective discipline being approximated. For example, the screening technique used to construct the Russell U.S. Large Cap Low P/E Index differs from the methodology for the construction of the Russell U.S. Large Cap Consistent Growth Index.
“The criteria chosen for each Russell Investment Discipline Index are based on Russell’s deep understanding of the preferences most typically emphasized by the applicable universe of managers,” said Agather. “Five of the Russell Investment Discipline Indexes, for example, rebalance quarterly, while the Russell U.S. Large Cap Contrarian Index rebalances semi-annually to reflect the longer time horizon typically associated with the types of companies representative of a contrarian investment discipline.”
For more information on these indexes and returns, go to www.russell.com/Indexes/data/investment_discipline/about_russell_investment_discipline_indexes.asp.
About Russell Investments
Founded in 1936, Russell Investments is a global financial services firm that serves institutional investors, financial advisers and individuals in more than 40 countries. Over the course of its history, Russell’s innovations have come to define many of the practices that are standard in the investment world today, and have earned the company a reputation for excellence and leadership. The firm has about $162 billion in assets under management as of March 31, 2011.
Russell launched its family of indexes in 1984 to more accurately measure U.S. market segments and better track investment manager behavior for its investment management and consulting businesses. The innovative index design includes float-adjusted market capitalization, annual reconstitution, multifactor style analysis as well as objective and transparent rules.
Russell Investments is a Washington, USA Corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.
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