Russell Investments and Research Affiliates have agreed to launch a new index series based on the Fundamental Index methodology.

The new relationship aims to produce readily investable strategy indexes, a category of indexes intended for investors who seek a more active investment approach. Through these new indexes, investors will have the opportunity to obtain alternative beta exposures that are appropriate for their portfolios, said Russell Investments.

The Fundamental Index methodology selects and weights securities by fundamental measures of company size, as opposed to using the price-weighted methodology employed by traditional indexes. Currently, approximately $50bn in assets are invested in products that use non-price-weighted index strategies as the underlying index.

The initial offering likely will be a global index that includes US and non-US exposures. Details on the new series is expected to be issued closer to their launch late in the third quarter.

These new investment tools will be available for licensing to exchange-traded fund sponsors, institutional investors and large plan sponsors.

Ron Bundy, managing director for Russell Indexes, said: “We’re very pleased to collaborate with Research Affiliates on this innovative index design. Working with the leader in fundamentally weighted index methodology, we’ll construct strategy indexes of the highest quality to serve the increasing demand for beta investment solutions.”

Rob Arnott, chairman of Research Affiliates, said: “Fundamental Index strategies are rapidly gaining acceptance around the world. We are thrilled to see Russell, a pioneer in index construction, embrace the concept, and to work with them on the development of these new fundamentally weighted strategy indexes.”