Alaska Permanent Fund picks Russell for $640m fundamental indexing brief - UPDATED

  • By: Raquel Pichardo-Allison
  • 14 Jul 2011
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US – Russell Investments has landed a $640m mandate from the Alaska Permanent Fund for its Russell Fundamental Developed Large Company Index, the first mandate win for the firm in its new suite of fundamental indices.

The sovereign wealth fund has moved assets out of a market-cap weighted strategy previously run by State Street Global Advisors.

Ken O'Keeffe, Managing Director, Indexes at Russell Investment confirmed this was the firm's first mandate win into these indices since their launch four months ago but said pension funds in both the US and Europe have shown interest. The firm runs 24 indices within the suite.

He said the firm expects to announce more mandate wins from US pension plans before the end of the quarter.

Maria Tsu, director of investments at the Alaska fund said: "Overall, we feel that the Russell Fundamental Index is a good fit for our needs and we look forward to working with both Russell and Research Affiliates on this new mandate."

In June 2010, fundamental index provider Research Affiliates announced it had partered with Russell to develop a suite of indexes for the US market. (Global Pensions; 25 June 2010)

Research Affiliates chairman Rob Arnott said at the time the new suit would use three measures to weight securities: a sales weight adjusted to reflect leverage in a company; dividends including stock buy-backs, and the retained cash flow net of dividends and buy backs.

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