In a further sign of the growing importance of the Australian funds management industry as a global leader in new products and strategies, the global head of product for Russell Investment Group has transferred from the firm’s Tacoma, US, head office to Sydney.

Shannon Vetto, who has been with Russell for more than 10 years, headed up a 47-person team, located around the world, involved with developing products for the group. Her new position, head of product Asia ex-Japan, will include some global responsibilities, while her old role is being assumed by a committee. Vetto, who has taken a three-year secondment in Australia, said Russell viewed Australia as a strategic centre. She has played a key role in launching Russell’s own multi-manager funds around the world, including in Australia over a six-month period in 1997, and Japan two years later. In the late 1990s she oversaw the construction of Russell’s separately managed account capability in the US. More recently, she has been involved in rolling out Russell’s ‘target date’ funds in the US, UK, Japan and Australia. These funds adjust asset allocation according to the investor’s age and are a popular choice for default funds in US 401(k) plans, which were previously confined to cash. Vetto said the next big push in the new product area in Australia and elsewhere would be various retirement products. With these, Russell would emphasise its investment capabilities. “Because retirement products can be tax exempt, it means that you can optimise the investment structure,” she said. Investment banks, which are also chasing this expanding market, are good at building products that produce an outcome Vetto says. But often they build in guarantees which start to increase the overall fees. “If you’re looking for a guarantee it usually means you’d don’t have enough money in the first place,” Vetto said. Russell’s first retirement products in Australia are the ‘Private Active Pension’ plans, which cover both accumulation and decumulation periods.

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