Global X Unveils Low-Cost Russell 2000 ETF

“Small-cap investments can help investors gain exposure to new and innovative growth opportunities and diversify their core equity allocations,” noted Rohan Reddy, Global X ETFs’ director of research. “We are thrilled to introduce RSSL, which provides that small-cap core exposure with a capping methodology intended to maintain diversification.”

RSSL aims to provide investors with results similar to that of the Russell 2000 RIC Capped Index. The fund has a low net expense ratio of 0.08%.

The Russell 2000 RIC Capped Index tracks the small-cap segment of the U.S. equity market. To prevent overconcentration, the index caps the weight for a single constituent at no more than 20% of the index. Additionally, the total weights of constituents representing over 4.5% of the index cannot surpass 48% of the total index weight.

Due to the index’s immense portfolio size, RSSL does not hold every single security within the index. To meet its investment strategy, RSSL uses a representative sampling strategy.

The fund prospectus notes that at least 80% of fund assets will be used towards investing in securities within the index. Over time, GlobalX expects the fund to exceed a 95% correlation between RSSL and its index.

This ETF rolled out as U.S. markets are facing heavy concentration due to mega-cap tech stocks such as the “Magnificent Seven.” RSSL provides investors with opportunity for long-term returns from small-cap stocks, which tend to have more growth potential.

RSSL costs less than other more established funds tracking the original Russell 2000 Index. The nearly $60 billion iShares Russell 2000 ETF (IWM A-) has an expense ratio of 0.19%, and the $9.2 billion Vanguard Russell 2000 ETF (VTWO A-) carries an expense ratio of 0.10%.

Currently, Global X has more than 90 ETFs available on U.S. markets. These funds account for over $48 billion in assets under management.

For more news, information, and analysis, visit VettaFi | ETFDB.