In a statement on Tuesday, Russell Investments said it has launched its first multi-strategy 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.
The Russell Investments Sustainable Global Opportunities Complex ETF (ASX:RGOS) was launched in response to a growing appetite for actively managed ETFs in Australia, alongside rising interest in investment solutions focused on the environment and sustainability, said Tim Furlan, managing director Australia and New Zealand at Russell Investments.
“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.
According to the firm, 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.
The firm’s 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.
The current managers include Sparinvest, Wellington Management, Neuberger Berman, and Mirova.
“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,” said James Harwood, senior portfolio manager at Russell Investments and one of two lead managers on the new fund.
“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.
“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.”
RGOS, which aims to outperform its benchmark, the MSCI All Country World Net Index, before costs and tax, will disclose its full holdings daily, giving investors transparency about how their money is being invested.
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).
