Russell Investments and Parametric Portfolio Associates have pooled their resources in order to offer a new joint index that will be a “vital metric for investment decisions” in the future, the two Washington-based firms said Monday.
The new amalgamation, which will includes the collaborative efforts of Russell, whose headquarters are in Tacoma, and Seattle-based Parametric, have made way for an index that will look to “measure the return dispersion of a universe of securities,” the Oct. 18 press release said.
Collectively, the “Russell-Parametric Cross-Sectional Volatility Indexes” will be divided amongst Russell’s indexes, and include calculations for separate market capitalizations. Russell is said to bring its “global index construction,” and Parametric will offer its “new calculation methodology,” the statement said.
Rolf Agather, head of index research and innovation at the 74-year old global financial services firm, explained that the strategy is “an important determinant of the success of active management.”
“We believe this measure will become a key indicator that investors in markets around the world can follow on a regular basis,” Agather added in the announcement.
Through its offerings of core equity, options strategies overlay portfolio management and emerging markets structured portfolio solutions, Parametric Director of Research Paul Bouchey explained in the press release that the collaboration is expected to assist clients in making better choices.
“Through our work with Russell, we offer managers a better way to make sure the risk profile of their portfolio is appropriate, and allow investors to assess performance records and help them make more informed decisions,” Bouchey said in the release.
As of June 30, Russell had roughly $140 billion in assets under management.