New Russell Strategic Call Overwriting Fund: Responds to Advisors Seeking a Strategy for Lower-Volatility, Equity-Like Returns
Managed entirely by Russell portfolio managers, new fund leverages firm’s multi-asset investing strengths to broaden advisors’ investment toolkits
Seattle, WA — — In response to significant interest among financial advisors in Russell’s proprietary call overwriting strategy, Russell Investments has launched the Russell Strategic Call Overwriting Fund. The new Fund provides advisors and their clients with access to the first non-cash retail fund managed directly by Russell’s portfolio managers without underlying managers. The Fund aims to provide total returns with lower volatility than U.S. equity markets, seeking gains from writing call options and from its equity portfolio and seeking income from dividends on stocks held.
“In our conversations with advisors, we have consistently heard that they are looking to provide clients with a call overwriting strategy to support long-term wealth creation while managing overall portfolio volatility,” said Phill Rogerson, managing director of Consulting and Product Development for Russell’s U.S. advisor-sold business. “Interest has only increased in the current volatile market environment and we are pleased to be able to activate Russell’s proprietary research in a mutual fund format that provides advisors and their clients with a key tool to employ this investment approach.”
The launch of the Russell Strategic Call Overwriting Fund follows several enhancements to Russell’s multi-asset portfolios and retail product offerings, including the launch of the Russell Multi-Strategy Alternative Fund and Russell U.S. Strategic Equity Fund as well portfolio reallocations and Fund strategy changes to incorporate insights based on the Russell Stability Indexes style-based benchmarks.
Overview: Russell Strategic Call Overwriting Fund
The Russell Strategic Call Overwriting Fund invests principally in equity securities economically tied to the U.S. market, using a multi-factor quantitative model to select primarily common stocks of large and medium capitalization companies. The Fund also writes (sells) index call options, typically on broad-based securities market indexes. The combination of buying common stocks and selling call options is known as “call overwriting.” Writing index call options is designed to reduce the Fund’s volatility relative to U.S. equity securities and provide the Fund with gains from premiums received.
The Fund is managed by a team of four Russell portfolio managers: Richard F. Johnson, Jr., CFA (Chartered Financial Analyst); Scott A. Maidel, CFA, CAIA (Chartered Alternative Investment Analyst) and FRM (Financial Risk Manager); Karl D. Sahlin, CPA (Certified Public Accountant); and Rafael Zayas, CFA.
“In the current market environment of uncertainty and limited growth, many advisors are shifting away from a classic long equities growth strategy,” explains Rogerson. “This Fund is in response to those wealth managers who ask us for strategies that can provide investors with attractive risk-adjusted returns and a potential reduction of losses during market downturns. We believe this responsive solution, launched with these advisors in mind, can provide value to them and their clients in order to improve portfolio outcomes.”
For more information, go to Russell Strategic Call Overwriting Fund.
About Russell Investments
Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Working with institutional investors, financial advisors and individuals, Russell’s core capabilities extend across capital market insights, manager research, portfolio construction, portfolio implementation and indexes.
Russell has about $159 billion in assets under management (as of 9/30/2012) and works with 2,400 institutional client and more than 580 independent distribution partners globally. As a consultant to some of the largest pools of capital in the world, Russell has $2.4 trillion in assets under advisement (as of 12/31/11). It has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell traded more than $1.5 trillion in 2011 through its implementation services business. Russell also calculates approximately 700,000 benchmarks daily covering 98% of the investable market globally, 85 countries and more than 10,000 securities. Approximately $3.9 trillion in assets are benchmarked to the Russell Indexes.
Russell is headquartered in Seattle, Washington, USA and has offices in Amsterdam, Auckland, Beijing, Chicago, Dubai, Frankfurt, 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 or follow @Russell_News.
Fund objectives, risks, charges and expenses should be carefully considered before investing. A summary prospectus, if available, or a prospectus containing this and other important information can be obtained by calling (800) 787-7354 or visiting www.russell.com. Please read a prospectus carefully before investing.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
This is a new fund without an operating history, which may result in additional risk. There can be no assurance that the fund will grow to an economically viable size, in which case the fund may cease operations. In such an event, investors may be required to liquidate or transfer their investments at an inopportune time.
The Fund call option writing (selling) strategy may limit its opportunity to gain from an increase in the market value of its equity portfolio and, conversely, may not reduce the extent of Fund losses during market declines. The Fund uses multi-factor quantitative models to select stocks and guide its sale of index call options. Quantitative models may be flawed and may cause the Fund to underperform other funds with similar investment objectives and strategies. The Fund equity returns may not match or achieve a high degree of correlation with the returns of the S&P 500 Index due to differences in security holdings, operating expenses, transaction costs, cash flows, operational inefficiencies and tax considerations.
S&P 500 Index is an index, with dividends reinvested, of 500 issues representative of leading companies in the U.S. large cap securities market.
Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets.
For more information on Russell Funds, contact your investment professional or plan administrator for assistance.
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.
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Securities products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments.
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