Global investment manager and solutions provider Russell Investments has today launched its first multi-strategy exchange-traded fund (ETF) in Australia, providing investors with access to an actively managed portfolio of international shares, with a focus on environmental, social and governance (ESG) related considerations.
Russell Investments Sustainable Global Opportunities Complex ETF (ASX:RGOS) incorporates the investment strategies of multiple global equities managers Russell Investments considers have ESG capabilities in global shares. RGOS takes ESG related considerations into account by selecting managers who have been identified by Russell Investments as having a sustainable investment strategy, and by applying exclusionary screens and net zero transition considerations.
Tim Furlan, managing director Australia and New Zealand at Russell Investments, said the appetite for actively managed ETFs continues to strengthen in Australia and, at the same time, investors seek investment solutions focused on the environment and sustainability.
“RGOS gives investors access to quality investment ideas from multiple managers. In selecting these managers, we assess how the manager integrates ESG characteristics or objectives in its processes,” Furlan said.
Russell Investments’ Head of Global Equities Will Pearce and Senior Portfolio Manager James Harwood will lead the management of RGOS’s investment portfolio. Harwood said RGOS provides institutional-grade risk control, active selection and outperformance potential which can be considered as part of a core international shares allocation in a balanced portfolio.
“For ESG-focused investors it is a balance between deliberate security selection in line with their values, while not being constrained by the opportunity set or bearing excessive risk. Our multi-strategy approach provides a diversified exposure to sustainable global shares with lower equity factor and stock risks, compared to a typical single manager active ESG-related strategy,” said Harwood.
“Individual active ESG managers can lean towards investment styles such as growth or quality, and either large or small cap. RGOS uses complementary managers to balance these factors to provide less volatile performance patterns, while still pursuing excess returns above RGOS’ global equity benchmark.”
Russell Investments’ dedicated manager research team evaluate more than 200 global equity managers who we consider have ESG capabilities for possible inclusion in the portfolio.
Russell Investments’ portfolio managers continually assess the managers and their suitability for the portfolio, with additions or replacements made as necessary, or as new opportunities are uncovered. This may include managers that are otherwise closed to new money or not immediately available to Australian investors.
The current managers include: Sparinvest, Wellington Management, Neuberger Berman, and Mirova, allowing Russell Investments to combine a mix of investment styles focussing on value, quality and growth.
RGOS will also disclose its full holdings daily, giving investors transparency about how their money is being invested.
RGOS aims to outperform its benchmark, the MSCI All Country World Net Index, before costs and tax, with a fee of 0.95% per annum on assets under management.
RGOS becomes the sixth product in Russell Investments’ suite of ETFs in Australia. Other Russell Investments’ products include three fixed income ETFs (RGB, RCB, RSM), and two Australian share ETFs (RDV, RARI).
