Russell to launch global style equity index

The new indexes, such as the Russell Global Large Cap Growth Index and Russell Global Large Cap Value Index, will be launched on April 1.

Rolf Agather, director of business development for Russell Indexes, said: "As investors flock towards global mandates, they're looking to us for more robust and transparent tools that reflect distinct market segments similar to what they've come to use for the US market." He made the announcement at the Indexing & ETF Investments Asia 2008 conference in Singapore.

"Our US-style methodology has earned close to 100% market share among institutional investors, and we aim to extend it globally as our research confirms the style phenomenon also exists outside the US market."

Agather added that since the launch of Russell Global Indexes in early 2007, Russell has extensively researched and considered how best to approach style index construction globally. He said: "Russell analysts research more than 8,000 manager products a year and through that work we've seen over time that they've increasingly taken on the challenge of moving from a domestic focus in their portfolios to a global one," Agather said. "As a result there's an increasing demand for better tools to improve analysis and understanding of global portfolios."

At Russell, "style is first and foremost a reflection of the differences in how money managers go about their task of selecting which stocks to hold in their portfolios. Certain approaches to equity investment lead to an emphasis on companies that are expected to perform well: delivering above-average growth in sales or earnings, for example. Other approaches place greater emphasis on valuation: how much must be paid for assets and whether – whatever the prospects of the company might be – these prospects are fairly reflected in the stock price.

"It was a growing awareness of the importance of this distinction in the early 1980s that led us to pioneer growth and value style indexes for the US market," said Agather. "We sought greater insight into manager behaviour and a clearer understanding of the sources of performance with the US market then, and we're aiming for the same now for global investing."

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