Magazine article American Banker

Growth of ETFs Drives Russell's Push to Expand Its Business

Magazine article American Banker

Growth of ETFs Drives Russell's Push to Expand Its Business

Article excerpt

Byline: Matt Ackermann

The number of exchange-traded funds has surged the past few years, bringing a unique business opportunity to Russell Indexes in Tacoma.

The division of Russell Investments began licensing its indexes 10 years ago to large and small ETF providers as a way of developing another revenue stream.

Though Rolf Agather, Russell's director of index research and innovation, wouldnot specify how much Russell has generated from this initiative, he said it is seeing a "growing portion of revenue" coming from licensing.

"For a lot of people, it is about having a recognizable brand," he said. "People want to invest in a fund that is backed by an index with an accurate and broad representation, but obviously having a name like Russell creates a certain affinity."

Agather said he thinks Russell offers more substance than, say, a pair of Nike sneakers, but will not deny that, like with Nike, simple brand recognition helps.

"We have been doing this for 25 years," he said. "We have evolved the methodology and developed these indexes. There are advantages to investing with a known index."

Currently, $4 trillion is benchmarked to Russell's family of global equity indexes and $65 billion is managed against these indexes in the form of exchange-traded funds. Sixty-three ETFs, from providers including ProShares and Rydex, use Russell's indexes. A year ago, 55 ETFs with $53.2 billion of assets under management benchmarked to Russell's indexes.

Last week, Vanguard Group announced plans to add 19 new funds by the end of this year, including ETFs based on the large-cap Russell 1000 index and the small-cap Russell 2000 index. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.