Russell Investments Looks To Shake Up The ETF Industry With It’s Own ETF’s

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July 23, 2009 11:38am ETF BASIC NEWS

russellinvestments“A top index provider is considering offering its own lineup of exchange traded funds, but just what those funds would look like is a mystery. Russell Investment Management Co., a unit of Russell Investments of Tacoma, Wash., applied July 2 for permission from the Securities and Exchange Commission to offer ETFs

,” David Hoffman From Investment News Reports.  See Our Story On The Filing Here

Hoffman continues saying “The filing contains little information about what kind of ETFs Russell would offer. The company declined to provide more details.” “We are evaluating additional opportunities in the ETF market on a global basis and have filed an application for exemptive relief with the [SEC] as part of our exploration process,” Steve Clairborne, a spokesman for Russell, wrote in an e-mail. “Successful completion of this process will provide Russell with the option to manufacture its own active and passive ETFs and/or provide investment content to ETF sponsors,” he wrote.

“It is the possibility of passive ETFs, however, that immediately raised eyebrows. Russell indexes are already the basis for 13 iShares ETFs distributed by Barclays Global Investors of San Francisco. BGI pays Russell a licensing fee to use its indexes,” Hoffman Reports.

Therefore, it is a safe bet that iShares won’t be too pleased if Russell comes out with ETFs based on the same Russell indexes as its own offerings, said Scott Burns, director of ETF analysis at Morningstar Inc. of Chicago. Offering ETFs based on its own indexes would make it easier for Russell to undercut iShares on price, he said. “There may be some very upset people,” Mr. Burns said.

Full Story: HERE


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