(July 14 – 11:05 ET) – London’s FTSE and U.S.-based index company Frank Russell have signed a deal to cooperate in the indexing business.
By the end of this year, Russell will adopt the FTSE’s global classification system for its U.S. equity indexes, including the small cap benchmark Russell 2000.
The deal is designed to give Russell broader distribution of its products, through the FTSE in Europe. It gives the FTSE a toehold in the U.S. where Russell’s indexes are used by 60% of fund managers.
At the centre of this deal is the FTSE’s desire to compete with its main rival, the Morgan Stanley Capital International indexes. The FTSE’s managing director, Mark Makepeace, says the deal “puts us in a great position to fight MSCI in its own backyard”.
Steven Schoenfeld, head of international equity strategy at Barclays Global Investors, one of the largest users of indexes, says, “Collaboration between FTSE and Frank Russell on production, industry classification and marketing will substantially benefit plan sponsors by increasing the industry’s market focus on broad-based investable indexes that reflect the market opportunity set.”
-IE Staff