Russell Fundamental U.S. Top 100 Volatility Control 7% index launches

By Tali David

Minneapolis, Oct. 23 - Russell Indexes announced that it has added a new index to the Russell Fundamental Index Series, the Russell Fundamental U.S. Top 100 Volatility Control 7% index.

According to a press release, the new index provides investors with exposure to the 100 largest U.S. stocks based on three fundamental measures - sales adjusted for leverage, retained operating cash flow and dividends plus buybacks - within a volatility control framework designed to target a 7% realized volatility.

Created in consultation with, and licensed to, J.P. Morgan, it combines the potential advantages of a fundamentally weighted investment strategy with a volatility control mechanism that seeks to provide stability in unpredictable markets, the release said.

The Russell Fundamental index series, which was launched in collaboration with Research Affiliates in 2011 and has gained widespread adoption by retail and institutional investors globally, uses fundamental economic measures of company size rather than stock price in selecting and weighting index constituents.

"We are fortunate to have had J.P. Morgan's input in developing this new index, which builds on our very successful collaboration with Research Affiliates," managing director of investable products Ken O'Keeffe said in the release.

"This new index combines the fundamentally weighted methodology with a means of targeting a specific level of volatility, allowing Russell indexes to again introduce an innovative index approach and a useful tool for investors."

Russell Investments is a Seattle-based global asset manager.

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