Russell's new ETF to target instos

Russell Investments has launched a new exchange-traded-fund (ETF), Russell Australian Value ETF, which targets institutional investors.

The company said the new ETF aimed to complement rather than compete with managed funds, and could potentially be used as a plug for an active manager while a new manager is being found.

The portfolio manager at Russell, Scott Bennett, said the company had spoken extensively to institutions about their needs and potential future use of ETFs, and discovered there was a gap in the market for a style-based tool.

Russell Australian Value ETF was developed based on the research on value premiums and investor feedback.

The research found that over time, passive value based strategies had typically delivered a premium of 1.5 per cent to 3 per cent over the broad market in Australia.

The new fund is Russell’s second ETF, which the company believes would gain as much support as its first ETF.

Russell Australia High Dividend ETF has collected over $140 million in assets under management since its launch less than a year ago.