Exchange-traded funds have gone from being an investing novelty to a trillion-dollar industry. One company with a long history of fundamental research and indexing has entered the ETF industry with a bang and is now introducing ETFs that look quite different from what you're used to seeing from most fund providers.

Not just the same old sector funds
With 75 years of expertise, Russell Investments has guided investors through generations of different market conditions. As a leader in creating benchmark indexes both for index funds to use and for actively managed mutual funds to evaluate themselves against, Russell is the company behind the popular Russell 2000 Index as well as similar benchmarks for big caps and the broader market as a whole both in the U.S. and around the world.

ETFs tracking Russell indexes, such as the iShares Russell 2000 ETF (NYSE: IWM), have been around for more than a decade. But instead of relying on index licensing revenue for its sole exposure to the ETF market, Russell decided to turn over a new leaf by creating its own proprietary ETFs. And unlike most of the funds you'll see from well-established fund companies like BlackRock's (NYSE: BLK) iShares, State Street's (NYSE: STT) SPDRs, and Vanguard, Russell's ETFs give investors a different way to think about investing.

Investing by discipline
ETF shareholders are used to seeing ETFs that slice and dice the investment universe in any number of ways. Different asset classes, different-sized stocks, different sectors, and different geographical exposure are just a few of the many ways that ETFs try to distinguish themselves from the crowd.

But Russell has come out with a new way to target the stocks you want. With its Investment Discipline ETFs, you can hone in on stocks that active fund managers might look to in order to follow their own particular strategies.

For instance, one of Russell's ETFs follows a "growth at a reasonable price" model, whereby the fund only invests in large-cap companies with valuations in line with their growth expectations, as well as consistent earnings and low amounts of leverage. For those with a contrarian bent, Russell Contrarian ETF (NYSE: CNTR) identifies stocks that have lagged the market over the long term, but where valuations show a potential catalyst to reverse their laggard tendencies.

An uphill battle
Russell certainly has the reputation to drive considerable interest to its ETF offerings. But the company also faces some formidable challenges.

First and foremost, Russell enters the ETF market only after ceding a huge lead to its earlier-adopting competitors. The industry leaders have hundreds of billions of dollars under management.

Perhaps more importantly, most large ETF providers have discovered how important it is to lock up distribution channels for their funds. That's one reason behind commission-free ETF offerings that many fund families have established. Schwab (NYSE: SCHW) and Vanguard have their proprietary funds on offer, while Fidelity linked up with iShares. TD AMERITRADE (Nasdaq: AMTD) selected a list of more than 100 ETFs from across several providers. Although several brokers, most notably E*TRADE (Nasdaq: ETFC), haven't picked ETF dance partners yet, the opportunities for Russell to find a profitable partner this late in the game are getting thin.

Keep your eyes open
With these funds having opened just a week ago, it's obviously far too early to tell whether they're likely to outperform more traditional ETFs. With annual expenses of 0.37%, Russell's ETFs carry a reasonable price tag, although it's much higher than you'll pay with most basic index ETFs.

Regardless of how these funds do, the innovation behind Russell's mind-set in creating these ETFs represents a potential paradigm shift for the industry. If Russell can succeed in getting investors who've been intimidated by the hundreds of ETF choices to feel more comfortable with its new way of dividing the stock universe, then you should prepare to see Russell's larger competitors follow suit with similar innovations of their own.

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Fool contributor Dan Caplinger always has to keep changing the game. He owns shares of iShares Russell 2000 Index ETF. The Fool has created a ratio put spread position on iShares Russell 2000 Index ETF. Motley Fool newsletter services have recommended buying shares of BlackRock and Charles Schwab and shorting iShares Russell 2000 Index ETF. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy plays the game and plays it well.