Russell Investments today announces the launch of the Russell Europe SMID 300 Index, providing the first index of highly liquid and rapidly tradable small- and mid-cap European stocks designed to be used as the basis of investable products. This is one more in a series of product and service enhancements introduced by Russell Indexes to European clients in the last year as the firm continues to build on its global capabilities.
Scott Stark, head of Russell Indexes Europe, comments, “There is significant demand in Europe for an investable small- and mid-cap index from hedge funds, asset managers and the trading community looking to gain exposure to this area of the European equity market. The Russell Europe SMID 300 Index was developed after lengthy consultations in Europe with a number of large financial institutions including Deutsche Bank, Goldman Sachs and UBS. As a result, the key feature of the new index is its tradability.”
The new Russell Europe SMID 300 Index comes at a time of increased focus on European small- and mid-cap equities. At the same time, it builds on the core strengths of Russell Indexes while addressing a critical challenge in European portfolio construction. “The trend we see in small- and mid-cap stocks since the beginning of the year is confirmation that the Eurozone crisis has been steadily abating thanks to policy action by the central bank and the European Union leaders,” said James Barber, portfolio manager of European multi-manager funds at Russell Investments Europe. “This progress is tenuous, however, and we could be back at the precipice later in the year. We would expect small- and mid-cap stocks to reflect any changes in the risk outlook in Europe.”
European investors recognize the potential investment opportunity in European small- and mid-cap stocks and are looking for easy access to re-enter this important market, yet have historically faced challenges gaining exposure to this area due to a lack of investable index-based products. The Russell Europe SMID 300 Index has been designed with a focus on quick tradability of the index constituents and, for the first time, puts an effective index-based portfolio construction tool in the hands of investors. Its innovative approach to constituent selection ensures a broad representation of stocks from across the capitalization range and easy, rapid trading of every single underlying constituent. The index is rebalanced each year in June as part of the Russell Indexes annual reconstitution.
The Russell Europe SMID 300 Index is a highly tradable representation of the small- and mid-cap European equity markets. The index has a limited number of highly liquid constituents allowing easy market access, while maintaining Russell’s tradition of objective, transparent and rules-based index construction that has been the hallmark of Russell Indexes since the company first introduced U.S. equity market capitalization indexes in 1984. Russell, the organization that developed the first small cap index in the U.S. with the introduction of the Russell 2000® Index of U.S. small cap stocks, has tapped its global market intelligence and expertise in index construction and methodology to develop this new product under the flag of its growing European arm.
For more information about the Russell Europe SMID 300 Index, go to the Russell Indexes Europe website.
