Even the best-designed multi-manager portfolio can move out of alignment with your investment policy statement. Just a small misalignment over time can result in exposure gaps, unintended risks, and a significant diversion from the path of your strategic investment beliefs.
When an investor allocates capital to more than one manager, an interaction effect exists, which will impact the investor's overall portfolio outcome. Due to this interaction effect between managers, unintended risks may emerge in the portfolio. Simply put, the combined positions of all managers may result in a bias toward a particular risk related to sector, region, or factor. These risks may not be fully aligned with the investor's preferred positioning based on long- and short-term investment opportunities and desired risk allocations.
Russell Investments' completion portfolios are designed to keep a client's investments precisely aligned with their investment beliefs without sacrificing the power of a multi-manager approach.
What are completion portfolios or portfolio completion strategies?
Completion portfolios (or portfolio completion strategies) are a powerful tool for an investor allocating to multiple manager strategies. The explicit role of these completion portfolios is to complement the existing managers and align the total portfolio with the desired risks and exposure of a client's total portfolio, thus managing the interaction effect.
Customized exposures used in combination with active third-party managers
Enables multi-managers to achieve preferred positioning, expressing strategic beliefs
Removes unwanted portfolio biases without swamping stock selection
Completion portfolios use security and derivative investments to target specific factors, sectors, regions, and currency exposures. This helps investors ensure that these risks are being managed and exposure gaps are being reduced while still allowing manager security selection to be the primary driver of overall performance.
The benefits of completion portfolios
Improve control of exposures
Completion portfolio strategies can provide a systematic way to solve for misalignment in portfolio exposures. They can help align the total portfolio with preferred positioning and improve the overall risk and return outcomes of an investor's portfolio.
Improve risk-adjusted returns
To achieve the desired long-term outcomes, portfolios must be managed to benefit from long-term return sources but with the ability to respond to short-term market risks and opportunities. Completion portfolios help investors achieve these outcomes.
Reduce the cost of production
In many cases, including a completion portfolio can help reduce the total cost expenditure on aggregate manager fees. It may also minimize turnover, trading, and required transition costs.
Four ways we help clients with completion portfolios
- Better management of factor and portfolio risks
Completion portfolios can ensure exposures to factor risks of the total portfolio are aligned with targets. This can mean reducing unintended exposure to volatility risk or targeting specific levels to other strategy factors such as value, momentum, quality, or others. In addition, the amount of active sector or regional risks are managed. - Gaining exposure to areas of the market where high conviction managers don't exist
Completion portfolios are designed to fill gaps. Examples include deep or defensive value exposure, quality income, and intelligent credit or currency factors. - Unshackling PMs in their manager allocation decisions
By creating risk management at the total-portfolio level, portfolio managers' decisions are freed up to focus on high-conviction alpha opportunities. In recent years, PMs focused on growth management while the completion portfolio provided value and low vol exposure to balance risk. - Opportunistic allocations
When shorter-term opportunities arise in the market, the client can reposition risk in the portfolio in a nimble, precise, cost-effective manner.
The Russell Investments advantage
Experience matters. We've been building and managing completion portfolios for institutional clients since 2008. Our completion portfolio platform has expanded to approximately 100 individual separate accounts, with more than $90.2 B in AUM.1 This includes completion portfolios used directly by institutional clients and those used within Russell Investments' multi-asset solutions.
Our seasoned specialists provide the expertise, resources, and infrastructure required to design and implement customised investment frameworks to address interaction effect and optimise your portfolio to improve risk-adjusted performance and prevent unintended and uncompensated risk.
We provide opportunities for clients with synthetic overlays to utilise liquidity more efficiently by investing in optimised strategies that align with their desired fixed income exposures.
Capabilities for greater portfolio precision
Factor investing has been one of Russell Investments' core capabilities for more than 40 years since the launch of the Russell-style indexes.
Our factor investing has continued to innovate and advance—from using factor exposures in our funds through our direct investing capabilities to having pure multi-factor funds. We use thoughtful and academically supported factor definitions, robust portfolio construction techniques, and consistent risk models.
Extensive quant infrastructure and flexible implementation
Thoughtful and academically-supported factor definitions
Consistent risk modeling
Robust portfolio construction techniques
Equities
Single and multi-factor solution:
- Value
- Momentum
- Quality
- Low volatility
- Growth
Completion portfolios
Systemic strategies, i.e., quality income
Fixed income / currency
Rates factor (value/carry)
Intelligent credit (value):
- Investment grade
- High yield
- Fallen angels
- Global credit/government
- Quasi-Sovereign-enhanced beta
Currency: Value, Carry and Trend
Passive / smart beta strategies versus external indices
LDI solutions
Enhanced cash
1 Source: Russell Investments. Data as of June 30, 2025. Currency figures are in Canadian Dollar (CAD)
Russell Investments has been globally recognized for excellence in the investment industry.
We have a proven track record in investment implementation, with scale, client satisfaction, innovative solutions and more than 35 years of experience.
A leading overlay services manager1
Factor investing offering of the year2
Factor investing offering of the year3
Perfect scores: outperformer in multiple categories4
1A Leading Overlay Services Manager (Pensions & Investments): The 2005-2025 Pensions & Investments’ survey ranking of leading overlay services managers is based on total U.S. institutional, tax-exempt overlay strategy assets, using quantitative data reported as of December 31 of the previous calendar year. The survey includes a varied number of firms, differentiated by year: 2025 (21 firms), 2024 (24), 2023 (27), 2022(27), 2021 (29), 2020 (30), 2019 (36), 2018 (39), 2017 (41), 2016 (36), 2015 (43), 2014 (40), 2013 (39), 2012 (39), 2011 (46), 2010 (47), 2009 (53). 2008 (53), 2007 (48), 2006 (43), and 2005 (43). We paid this publication a fee for licensing usage and rights of the award logo/badge.
2Factor Investing Offering of the Year | (2024 Pensions Age Awards): Russell Investments was named the “Factor Investing Offering of the Year” winner at UK’s 2024 Pensions Age Awards. The judges praised Russell Investments’ deep comprehension of the significance of factor investing in the pension sector and their dedication to meeting client needs, thus establishing a high standard for the industry. Winners were announced February 21, 2024, based on business activities ending January 19, 2024. The awards are open to any UK pension scheme or provider that serves UK pension schemes. Recipients were selected by an independent panel of judges organized by Pensions Age, based on qualitative criteria such as innovation, client service, and contributions to the pension investment industry. This recognition should not be interpreted as a testimonial or endorsement by any client or investor, and it does not guarantee future performance or success. Short-listed recipients were invited to the following publications' awards ceremonies, in which we purchased an event table and received licensing usage rights of the award logo/badge.
3Factor Investing Offering of the Year | (2024 European Pensions Awards Factor Investing Offering of the Year): Russell Investments was named the “Factor Investing Offering of the Year” winner at the 2024 European Pensions Awards. The judges praised Russell Investments for its passion and expertise in the factor investing space, as well as its performance and innovation. Winners were announced July 4, 2024, based on business activities ending December 31, 2023. The awards are free to enter and open to any firm serving European pension funds. Winners were selected by a panel of independent judges, including industry experts and pension trustees. This recognition should not be interpreted as a testimonial or endorsement by any client or investor, and it does not guarantee future performance or success. Short-listed recipients were invited to the following publications' awards ceremonies, in which we purchased an event table and received licensing usage rights of the award logo/badge.
4Perfect scores: Outperformer in multiple categories; Perfect Scores: Outperformer in Multiple Categories; Perfect Score: Client Service and Relationship Management; Perfect Score: Onboarding; Perfect Score: Business Model and Other Factors; Perfect Score: Cost Versus Value For Money | (2023 The TRADE Outsourced Trading Survey): Russell Investments was ranked first in multiple categories in The TRADE’s inaugural “Outsourced Trading Survey” published November 2023 (out of 14 providers), receiving four perfect scores in: Client service and relationship management; Onboarding; Business model and other factors; and Cost versus value for money. The TRADE’s 2023 Outsourced Trading Survey, conducted in partnership with Ergo Consultancy, reflects client perceptions of outsourced trading providers based on a 7-point rating scale. The results are derived from subjective feedback and do not constitute a ranking or evaluation of provider performance or investment outcomes. Respondents included asset managers, hedge funds, and institutional investors from regions such as the North America, Europe, Asia, and Australia. Recognition in this survey is based solely on client sentiment and does not guarantee future performance or success. Clients were not compensated for participating in this survey. We paid this publication a fee for licensing usage and rights of the award logo/badge.
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