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FTSE Russell, a leading global index provider, today announces the launch of a new Russell 3000 Fixed Income Index and Russell 1000 Fixed Income and Russell 2000 Fixed Income sub-indices. Together with its sub-indices, the Russell 3000 Fixed Income Index delivers a curated market weight benchmark for investors, who seek precision allocation to track the US domestic corporate bond market.
- Centred on debt issued by Russell 3000 issuers, the index brings a unique lens to corporate benchmarking and avoids the unintended risks of foreign asset exposures within US corporate portfolios.
- Provides a passive ‘crossover’ element which captures corporate bonds straddling US investment-grade and high-yield markets.
- Aligns in selection and reporting with its equity counterpart and should resonate with multi-asset investors who seek a balanced portfolio across US equity and fixed income assets.
The Russell 3000 Fixed Income Index tracks the US corporate bond market by focusing on the debt of the large, publicly traded companies and the debt of their US-domiciled subsidiaries that make up its equity counterpart, the Russell 3000 Equity Index. This index of domestic US bond issuers helps investors to manage corporate credit risk exposure in a domestic portfolio.
The Russell 1000 Fixed Income Index and the Russell 2000 Fixed Income Index membership corresponds to the equivalent equity sub-indices of the Russell 3000, granting investors flexibility and transparency in their asset allocation strategy. This consistent approach to issuer and sector positioning across Russell indices allows for holistic portfolio construction.
- The Russell 3000 Fixed Income Index includes debt of public companies in the Russell 3000 and their US subsidiaries. The index supports multi-asset strategies, and cross-sector research, and tracks performance by the ICB industry classification.
- The Russell 1000 Fixed Income Index captures debt of public companies in the Russell 1000 and their US subsidiaries and is a sub-index of the Russell 3000 Fixed Income index.
- The Russell 2000 Fixed Income Index comprises debt of public companies in the Russell 2000 and their US subsidiaries and is a sub-index of the Russell 3000 Fixed Income Index. The index is uniquely positioned to support the needs of private equity investors to track fixed income component of private equity.
A new FTSE Russell research paper, Russell Fixed Income Indices – Investment Precision, explores the role of fixed income investing in the US domestic corporate bond market. This paper highlights that having an equity and fixed income index constituent and industry classification alignment opens the possibility for diverse multi-asset strategies or risk parity indices.
Marina Mets, Head of Americas, Fixed Income and Multi-Asset Index Product Management at FTSE Russell, comments: “Building on our expertise of tracking fixed income markets globally, the launch of Russell Fixed Income index series marks a modern and innovative approach to track the US corporate bond market and provides investors with a sophisticated degree of granularity and investment precision demanded in today’s market.”
Catherine Yoshimoto, Director, Equity Product Management and Benchmark Product Development at FTSE Russell, said: “The Russell Fixed Income Indices are a stepping-stone towards leadership in the multi-asset index solution space, providing our clients a single point of access, methodological parity and holistic approach to portfolio construction. This benchmark for the US corporate credit market is a complementary counterpart to the Russell US Equity Index franchise, extending the transparency and flexibility we offer our clients.”
