Russell Investments introduces new ESG-focused ETF

Russell Investments has launched its first multi-strategy exchange-traded fund (ETF) in Australia, offering investors access to an actively managed portfolio of international shares with a focus on environmental, social and governance (ESG) considerations.

Russell Investments has launched its first multi-strategy exchange-traded fund (ETF) in Australia, offering investors access to an actively managed portfolio of international shares with a focus on environmental, social and governance (ESG) considerations.

The Russell Investments Sustainable Global Opportunities Complex ETF (ASX: RGOS) incorporates the investment strategies of several global equities managers, including Sparinvest, Wellington Management, Neuberger Berman, and Mirova, which Russell Investments has acknowledged for their "ESG capabilities in global shares."

Russell Investments' manager research team has also evaluated over 200 global equity mangers, identified for their ESG capabilities, for possible inclusion in the portfolio.

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The research team will continue to assess the managers and their suitability, with additions or replacements made as necessary, or as new opportunities are uncovered. This may include managers that are otherwise closed to new money or not immediately available to Australian investors.

RGOS aims to out outperform its benchmark, the MSCI All Country World Net Index, before costs and tax, with a fee of 0.95% per annum on assets under management.

Russell Investments managing director of Australia and New Zealand Tim Furlan said the appetite for actively managed ETFs continues to strengthen in Australia and, at the same time, investors seek investment solutions focused on the environment and sustainability.

"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.

Russell Investments' head of global equities Will Pearce and senior portfolio manager James Harwood will lead the management of RGOS's investment portfolio. Harwood said RGOS provides institutional-grade risk control, active selection and outperformance potential which can be considered as part of a core international shares allocation in a balanced portfolio.

"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. 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," Harwood said.

"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 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).