As a practical application an investor who realizes they don't quite have the tolerance for the typical volatility that goes with an allocation to a standard index like the S&P 500 or Russell 1000 could create a more suitable allocation using the Russell funds.
For example a less tactical investor with a low tolerance for volatility could build a combo of 80% Russell 1000 Low Volatility and 20% Russell 1000 High Volatility which will allow for a somewhat smoother ride but also give some upside participation. This type of strategy could create a way back into equities for people who were scared out in 2008.
As a more tactical approach an investor could switch between lower beta and volatility funds and higher beta and volatility funds based on some sort of technical indicator such as the underlying index breaching a significant moving average.
In a slightly longer term perspective, if these funds are successful for investors then it would make sense for Russell to create similar funds built around foreign indices. Like the domestic funds, these would allow for specialized portfolio construction that, for now, cannot be had with broad index funds.
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