Russell Indexes today launched the Russell High Efficiency Defensive Indexes, which it touts as “the first and only series of low volatility benchmarks to offer low targeted tracking error.” The index was developed in collaboration with Westpeak Global Advisors, an independent research and investment management company.
The Russell Defensive Index ranks constituents based on an assigned stability score and weights them according to market capitalization. The indexes are rebalanced on a quarterly basis.
"Since their introduction in 2011, the Russell Defensive Indexes have appealed to investors who want to identify stocks on the basis of economic stability measures,” stated Rolf Agather, managing director of global research and innovation at Russell Indexes.
"By building on this concept, the Russell High Efficiency Defensive Indexes provide an additional option for investors interested in the Defensive Index methodology but seeking a more direct link between a company’s stability factor and its weight within the portfolio and a lower tracking error relative to current low volatility indexes.”