Russell has disclosed that it plans to make a "strategic review" of its ETF business and to scale back its ETF team. These announcements come after FocusShares revealed that it would be closing all of its ETFs, which has prompted Carolyn Hill from IndexUniverse to wonder whether Russell would be shutting down its ETFs.

Carolyn Hill reports that the closure of some funds is expected for Russell, but shutting down the whole ETF suite seems unlikely.

Russell has over $300 million spread across 26 funds. At least four of the funds are successful ETFs with reasonable asset bases ranging between $50 million to $70 million.

In contrast, FocusShares managed over $100 million in assets across its 15 ETFs, with the Focus Morningstar US Market ETF, its most popular fund, having less than $20 million in AUM as of July 31.

Hill notes that Russell ETFs charge higher expense ratios, roughly about 33 basis points on average, which is significantly higher than those charged by FocusShares ETFs. FocusShares had charged between 5 and 19 bps, a model that was impractical for funds with a low asset base.  

Edited by: HFD


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