Oregon Investment Council selects Russell Fundamental Index® series for U.S. large company mandate
Second U.S. public plan selects new index, underscoring increased investor interest in Fundamental Index strategies to complement market capitalization-weighted approaches
Seattle, WA — — Russell Investments announced today that the Oregon Investment Council, which manages the approximately $60 billion Oregon Public Employees Retirement Fund, has selected the Russell Fundamental U.S. Large Company Index for a new internally managed U.S. equity investment mandate of approximately $500 million. Strategic Investment Solutions acted as investment consultant to the Oregon Investment Council.
“Overall, we feel this new approach offers us the best of both worlds. We gain the increased efficiency and consistency an index strategy can potentially provide yet also benefit from a more fundamental investment approach,” said Mike Viteri, Senior Investment Officer for Public Equities at the Oregon State Treasury. The mandate, which is expected to fund by September 30, will draw from a combination of existing domestic actively managed and passively indexed U.S. large cap portfolios.
Russell Investments and Research Affiliates announced in February the launch of a new index series based upon Research Affiliates’ unique Fundamental Index methodology that selects and weights constituents by fundamental measures of company size, as opposed to market capitalization. The Russell Fundamental Index® Series strategy is comprised of 24 indexes designed to offer alternative beta solutions to investors who desire access to non-capitalization-weighted products.
Recognizing the opportunity to bring alternatively weighted products to market, Russell Investments and Research Affiliates announced a strategic alliance in 2010 to begin developing these investment strategy indexes. The Russell Fundamental Index® Series aims to provide a cost-efficient alternative to active management, adding another distinctive facet to Russell’s already robust offering of market capitalization-weighted indexes. The three fundamental measures used for the Russell Fundamental Index are a company’s five-year average adjusted sales, retained cash flow, and dividends paid plus share buybacks.
“The selection of our newly launched Russell Fundamental U.S. Large Company Index by Oregon signals that investors are seeking a more active approach to potentially realize much sought-after alternative beta exposures, along with the transparency, objectivity and broad diversification they have come to expect from the Russell Index family,” said Rolf Agather, managing director for index research and innovation at Russell Investments. This is the second institutional mandate for Russell in the new strategy. The firm recently announced a $640 million mandate for its Fundamental Index with the Alaska Permanent Fund Corporation.
To learn more about the Russell Fundamental Index® Series and to view a full list of indexes available, please go to the Fundamental Index Series on the Russell website.
About Russell Investments
Russell Investments is an independent, global financial services firm that provides strategic advice, investment solutions, implementation services and global performance benchmarks that are customized to meet the unique needs of institutional investors, financial advisors and individuals.
Celebrating its 75th anniversary in 2011, 25 years in Sydney and Tokyo and 15 years in the Netherlands, Russell has pioneered innovations that have come to define many of the practices that are standard in the investment world today, and has four decades of experience researching and selecting money managers globally.
Russell has about $163 billion in assets under management (as of 6/30/11) and works with 2,300 institutional clients, 530 independent distribution partners and millions of individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell has $2 trillion in assets under advisement (as of 12/31/2010) and traded $1.4 trillion last year through its implementation services business. The Russell Global Indexes calculate over 50,000 benchmarks daily covering 85 countries and more than 10,000 securities.
Founded in 1936, Russell is headquartered in Seattle, Washington, USA and has offices in Amsterdam, Auckland, Chicago, London, Melbourne, Milan, New York, Paris, San Francisco, Seoul, Singapore, Sydney, Tokyo and Toronto. For more information about how Russell helps to improve financial security for people, visit www.russell.com.
About Research Affiliates, LLC
Research Affiliates, a global leader in innovative investing and asset allocation strategies, operates worldwide from its base in Newport Beach, Calif. Dedicated to solving complex investment issues, the firm creates innovative strategies that respond to the current needs of the market. Leveraging its strong research focus, Research Affiliates distributes products in partnership with some of the world’s leading financial institutions. These affiliations take the form of direct asset management, sub-advisory services, and licensing agreements. The firm is majority employee-owned and has more than 50 employees. Approximately $83 billion in assets are managed worldwide using investment strategies developed by Research Affiliates, as of June 30, 2011.
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
Russell Investments and Research Affiliates LLC have entered into a strategic alliance with respect to the Russell Fundamental Indexes. Subject to Research Affiliates’ intellectual property rights in certain content, Russell Investments is the owner of all copyrights related to the Russell Fundamental Indexes. Russell Investments and Research Affiliates jointly own all trademark and service mark rights in and to the Russell Fundamental Indexes.
The trade names Fundamental Index®, RAFI®, the RAFI logo and the Research Affiliates® corporate name and logo are registered trademarks and are the exclusive intellectual property of Research Affiliates, LLC. Any use of these trade names and logos without the prior written permission of Research Affiliates, LLC is expressly prohibited. Research Affiliates LLC reserves the right to take any and all necessary action to preserve all of its rights, title and interest in and to these terms and logos. Fundamental Index®, the non-capitalization method for creating and weighting of an index of securities, is the patented patent-pending proprietary intellectual property of Research Affiliates, LLC.
Russell’s indexes are unmanaged and cannot be invested in directly.
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