Source is pleased to announce the launch of the Source Russell Europe SMID 300 UCITS ETF. The fund provides exposure to the Russell Europe SMID 300 Net TR index ("SMID"), which is designed to offer liquid exposure to Europe's small- and mid-cap equity markets. The ETF offers access to a segment of the market which is gaining increasing investor interest; there are currently EUR 9 billion assets1 in the ETF small and mid-cap space in Europe, up from EUR 1.8 billion in 20122.
The index contains 300 highly liquid constituents. Constituents are selected from the Russell Global Index comprised of approximately 10 000 stocks. This is reduced to European small and mid-cap stocks, defined as those companies falling between the 75th and 95th percentile by market capitalisation of the Russell Global Index. Stocks with an average daily trading volume lower than EUR 2million are then excluded. The remaining eligible stocks are ranked by 'speed to trade' defined as those with the lowest free float market capitalisation relative to their average daily trading volume. The 300 highest-ranked stocks are selected and then weighted by free float-adjusted market capitalisation. The index is reviewed and rebalanced annually.
This approach allows for both higher investment capacity and the inclusion of stocks from across the capitalisation range, without compromising liquidity. Russell Europe SMID 300 Net TR index comprises stocks like Baratt Developments Plc, easyJet Plc and Hargreaves Lansdown Plc.
In 2013, small and midcap out performed large cap across developed markets. In Europe, the Russell Europe SMID 300 Net TR index outperformed the Euro Stoxx 50 TR index by 7.50%and in the US, the Russell 2000 index, outperformed the S&P 500 TR index by 6.70% over the year 3.
According to the Morningstar fund database, when SMID is compared to other active and index fund peers, SMID performed strongly over a 5 year period vs. both small and mid-cap funds. The SMID index delivered first quartile performance 45% of the time vs. small-cap funds and 55% of the time vs. mid-cap funds. Over the last 5 years the SMID index outperformed the average return of the universe of small cap funds 58% of the time; and mid-cap funds 73% of the time.
"In each market segment, Source aims to offer efficient and representative exposure, meeting investor needs" says Source CEO Ted Hood. "This product offers European investors access to a broad cross-section of Europe's promising small- and mid-cap markets."
"The Russell Europe SMID 300 Index has been designed with considerable input from the trading community" adds Ron Bundy, CEO, Indexes of Russell Investments. "Its innovative construction ensures ease of use in the trading environment, which translates to lower costs and swifter execution for investors. We are very pleased to help Source expand its offering for European investors."
1 As of 28/02/2014
2 As of 31/12/2012.
The Source Russell Europe SMID 300 UCITS ETF trades on Deutsche Börse in EUR. The management fee is 0.35% per annum.
Key product terms :
Product Name: Source Russell Europe SMID 300 UCITS ETF
Base/trading currency: EUR / EUR
Bloomberg: SMLM GR
Management fee: 0.35%
Index: Russell Europe SMID 300 Net TR
Index currency: EUR
Index Bloomberg code: RUESM3NE Index
Index calculation agent: Russell Investments
Source UK Services Limited is authorised and regulated by the Financial Conduct Authority in the UK.
The prospectus documentation describing the products, risks and related costs of Source products are available for residents of countries where such products are authorised for sale at www.source.info The products described within this publication are not suitable for everyone. Investors' capital is at risk and they may get back less than they invested. Investors should not deal in these products unless they understand their nature and the extent of their exposure to risk. The value of these products can go down as well as up and can be subject to volatility due to factors such as price changes in the underlying instrument and interest rates. It is recommended that potential investors study the relevant product prospectus before investing.
For further information:
Source Tel: +44 20 3370 1102
Michael John Lytle firstname.lastname@example.org
CTF Corporate & Financial Tel: +44 20 3540 6456
Adrian Flook email@example.com
Russell Investments Tel: +44 20 7024 6709 Emma Collins ECollins@russell.com
Notes to Editors:
Source is an asset manager and one of Europe's leading Exchange Traded Product (ETP) providers, with over US$16 billion in assets under management. Since launch in April 2009, Source has focused on delivering incremental value to European ETP investors through a combination of enhanced indices, strong partnerships, improved structuring and active trading. Its range of just under 80 products gives investors the ability to gain exposure to equities, commodities, fixed income and alternative assets, through ETF and ETC structures with deep liquidity, increased transparency and reduced counterparty risk.
Further information about Source is available at www.source.info
Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Russell stands with institutional investors, financial advisors and individuals working with their advisors--using the firm's core capabilities that extend across capital market insights, manager research, portfolio construction, portfolio implementation and indexes to help each achieve their desired investment outcomes.
Russell has more than $256 billion* in assets under management (as of 12/31/2013) and works with over 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell has $2.4 trillion in assets under advisement (as of 6/30/2013). It has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell traded more than $1.4 trillion in 2012 through its implementation services business. Russell also calculates approximately 700,000 benchmarks daily covering 98% of the investable market globally, including more than 80 countries and more than 10,000 securities. Approximately $4.1 trillion in assets are benchmarked to the Russell Indexes, which have provided investors with 30 years of smarter beta.
Headquartered in Seattle, Washington, Russell operates globally, including through its offices in Seattle, New York, London, Paris, Amsterdam, Sydney, Melbourne, Auckland, Singapore, Seoul, Tokyo, Beijing, Toronto, Chicago, San Diego, Milwaukee and Edinburgh. For more information about how Russell helps to improve financial securities for people, visit www.russell.com or follow us @Russell_News.
*includes more than $74 billion of derivative overlay assets under management not included prior to June 30, 2013.
Russell Investments is a Washington, USA Corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company. Russell Investments is the owner of the trademarks, service marks and copyrights related to the Russell Indexes. Indexes are unmanaged and cannot be invested in directly.