Russell Global Index reflects 2.5% downturn for July Developed markets outperform emerging markets for the month August 1, 2008 — The Russell Global Index reflected a decline of 2.5% for the month of July — and a year-to-date decline of 12.9% — as emerging markets underperformed developed markets across the world. The Russell Developed Index showed a decline of 2.4% for the month as the Russell Emerging Markets Index shed 3.2%. Within emerging markets, the Russell Emerging Markets Large Cap Index outperformed its small-cap counterpart and some regions, particularly Latin America and emerging Europe, underperformed. "With the further policy action taken by the Federal Reserve and the U.S. Treasury, we saw a significant reversal in developed market sector leadership during July," said Rob Balkema, portfolio analyst for Russell Investments. "U.S. financials in the Russell Global Index rose 6.4% this month while a 10% pull back in the price of crude sent the energy sector down 15%." He noted that the Russell Developed ex-U.S. Index reflected a loss of 3.8% for the month, while the U.S. component of the index outperformed with a slight decline of 0.8%. "Putting further pressure on the decoupling story, we saw the emerging markets pull back significantly compared to developed markets this month," said Balkema. "This was most evident in the commodity led sectors where the energy sector fell 12.7% and the materials sector fell 5.7% in the Russell Emerging Markets Index." In addition, the energy sector in the Russell Latin America Index lost 18.7% and similarly it declined 18.9% in the Russell Asia Pacific Index. These returns made the -11.4% decline for the energy sector in the Russell Europe Index appear relatively strong. This shift in sector leadership propelled the Russell Global Value Index (-1.7%) to outperform the Russell Global Growth Index (-3.2%) for the month of July. However, year-to-date returns through the end of July show global growth slightly outperforming global value. Even so, some of the worst-performing segments of the market for 2008 are in the growth arena, including the Russell Emerging Markets Small Cap Growth Index (-26.7%), Russell Emerging Asia Growth Index (-27.5%) and Russell BRIC Growth Index (-26.1%). One contrasting bright spot was reflected by the Russell Latin America Growth Index (-4.1%). Among individual countries, the Russell Turkey Index (22.7%) and Russell Vietnam Index (18.8%) outperformed, while the Russell Hungary (9.7%), Russell Poland (9.5%) and Russell India (7.1%) indexes also reflected relatively strong returns. The Russell China Index (1.9%) also gave a slight boost to the Russell Global Index. Sector returns for July     Russell Global Index   Russell Developed Index   Russell Emerging Markets Consumer Discretionary   -1.6%   -1.9%   2.0% Consumer Staples   0.8%   1.2%   -2.6% Energy   -13.4%   -13.5%   -12.7% Financial Services   2.7%   2.6%   3.3% Health Care   4.1%   4.2%   0.4% Materials & Processing   -7.1%   -7.5%   -5.7% Producer Durables   -1.3%   -1.3%   -1.0% Technology   -0.5%   0.2%   -6.1% Utilities   -2.9%   -3.6%   0.7% For additional performance figures on Russell's indexes and the user-friendly Russell index returns calculator, please visit: www.russell.com/Indexes. About Russell Russell Investments provides strategic advice, world-class implementation, state-of-the-art performance benchmarks and a range of institutional-quality investment products. Russell has more than $211 billion in assets under management as of June 30, 2008, and serves individual, institutional and advisor clients in more than 40 countries. Russell's industry-leading indexes have $4.4 trillion in assets benchmarked to them as of Dec. 31, 2007. Founded in 1936, Russell is a subsidiary of The Northwestern Mutual Life Insurance Company. Contacts: Steve Claiborne, 253-439-1858 Russell Investments, a Washington, USA corporation, operates through subsidiaries worldwide. Russell Investments is the owner of the trademarks, service marks and copyrights related to its indexes. Russell's indexes are unmanaged and cannot be invested in directly. CORP-5522			Past reports View more Russell Indexes commentaries and articles   Printer friendly version of this page

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