Russell Adds Risk Management Diversity to Bond Fund
The new managers within the fund are Wellington Management Company, Macro Currency Group (an investment group within Principal Global Investors) and Colchester Global Investors Limited. With these additions, the fund now features a total of seven money manager assignments.
Wellington Management Company was assigned 20% of the fund. In contrast to other assignments in the fund, Russell’s manager research shows Wellington offers a multi-strategy approach that primarily focuses on developed government bond and currency markets, emerging markets and modest long/short credit strategies. Wellington’s portfolio construction process, which relies on four independent teams and focuses on different risk drivers, also is expected to complement the existing managers by having a lower correlation to them through a more diverse set of strategies.
Macro Currency Group, which was assigned 7.5% of the fund, has a fundamental thematic approach to forecasting changes in currency values. The group’s investment philosophy is based on the belief that currency markets are driven by cross-border capital flows, and the firm believes the best way to gain from these flows is to focus on predicting major themes that drive them. This top-down global macro approach looks for trends that are unique and different in each market cycle.Colchester Global Investors Limited also was assigned 7.5% of the fund. Colchester’s top-down macro approach emphasizes going long and short various currency and country bonds, primarily sovereign non-U.S. bonds and currencies. Other assignments in the fund, by contrast, are more focused on U.S. bonds and tend to seek value through issue selection and use of riskier “spread sectors” such as corporate, high yield and mortgage strategies.
“We believe diversification continues to be the most powerful tool for risk management amid ongoing volatile markets,” said Phill Rogerson, managing director for consulting and product in Russell’s adviser-sold business. “These new fixed-income assignments are a pro-active reaction to current conditions in credit markets and, based on our research, these best-of-breed global investment managers offer additional insights and strategies to uncover value and manage for risk.”
For more information on the Russell Strategic Bond Fund, visit http://www.russell.com/us/investment_products/russell_funds/strategic_bond_overview.asp.