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Russell Investments unveils first multi-strategy ETF

Yasmine Masi17 April 2024
Finger touches ETF screen

Russell Investments’ sixth exchange traded fund (ETF) launch introduces its first product to incorporate multiple strategies from different managers focused on environmental, social and governance (ESG) issues.

The Russell Investments Sustainable Global Opportunities Complex ETF (RGOS) provides investors access to four successful investment strategies with ESG considerations run by global equities managers selected by Russell Investments. The ETF will also apply screening processes and net zero transition considerations to its portfolios.

“RGOS gives investors access to quality investment ideas from multiple managers. In selecting these managers, we assess how the manager integrates ESG characteristics or objectives in its processes,” Tim Furlan, Managing Director Australia and New Zealand at Russell Investments, said.

The managers selected to contribute to the ETF’s investment approach currently are Sparinvest, Wellington Management, Neuberger Berman, and Mirova. RGOS will be primarily managed by Russell Investments’ Head of Global Equities, Will Pearce, and Senior Portfolio Manager, James Harwood.

“For ESG-focused investors it is a balance between deliberate security selection in line with their values, while not being constrained by the opportunity set or bearing excessive risk. Our multi-strategy approach provides a diversified exposure to sustainable global shares with lower equity factor and stock risks, compared to a typical single manager active ESG-related strategy,” Harwood said.

“Individual active ESG managers can lean towards investment styles such as growth or quality, and either large or small cap. RGOS uses complementary managers to balance these factors to provide less volatile performance patterns, while still pursuing excess returns above RGOS’ global equity benchmark.”

Russell Investments will continuously consider over 200 global equities managers for possible inclusion in the portfolio. RGOS seeks to outperform its benchmark, the MSCI All Country World Net Index, with a fee of 0.95% per annum on assets under management.

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