Russell Investments has launched a new family of equal weight indexes that also manage for sector risk and are easily replicated for investable products. The indexes apply to each of the nine Russell global sectors: consumer discretionary, consumer staples, energy, financial services, healthcare, materials and processing, producer durables, technology and utilities.
“These groundbreaking investment tools offer a practical, unique solution for investors who are interested in alternative weighting methods,” said Rolf Agather, managing director of index research and innovation at Russell. “Russell’s research shows that the additional step of equal weighting sectors provides greater diversification benefits than a traditional approach which simply equal weights all constituents.”
He added: “The market-cap approach remains the most popular, and we believe it is the best way to truly reflect market segments. However, we also recognize increasing interest in alternative-weighting products that offer unique beta exposure.”