Russell Investments has launched the Russell UK Mid 150 Index, in response to specific sell-side demand for exposure to the UK mid-cap market that can be traded with high efficiency.
The first UK-dedicated index from Russell reflects the organisation’s focus on designing European indices that meet the trading and liquidity needs of today’s market participants.
The Index provides a representation of the UK mid-cap market, comprising 150 stocks from across the mid-cap universe which are listed on UK stock exchanges and denominated in sterling. It uses a screening process whereby on a monthly basis stocks are screened according to their capacity to be traded in volume. This approach to constituent selection ensures that the Index as a whole can be easily and rapidly traded within an index-based portfolio.
Gareth Parker, senior director of index research and design for Russell Investments Europe, says: “The UK Mid 150 Index follows Russell’s rules-based, transparent index approach and has been designed with our clients’ needs firmly in mind. The index is a trading-oriented one, and constituents are evaluated monthly in order to provide greater liquidity, higher capacity and lower costs for those looking to access UK mid-cap investment opportunities.”
Russell consulted with a number of large global investment banks and product issuers, including Barclays, Goldman Sachs and J.P. Morgan, to understand the needs of their buyside clients for products that are readily and quickly tradable, and have a high investment capacity in what can be a relatively illiquid market.
Stephane Degroote, sales director for indexes at Russell Investments Europe, says: “We are excited to have worked in close collaboration with key global investment banks to deliver a unique market access tool for the UK mid-cap segment. This is in response to growing investor demand for more tradable and cost-effective hedging, tactical investment and cash management solutions in small- and mid-cap stocks.”
The new index is currently available for use by the European investment community. Furthermore, Russell Indexes has been working with NYSE Liffe on the development of futures based on the Russell UK Mid 150 Index. These new futures are expected to be made available for trading on Bclear, the exchange’s trade administration and clearing service.
