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BRIC index reflects 24.8% surge for May
81% of stocks in the Russell Global Index gain for the month
June 1, 2009 — The Russell Global Index reflected an increase of 10.3% for the month of May amid a generally positive month for markets worldwide. Some leading benchmarks for the month included the Russell Greater China Small Cap Index (26%), Russell BRIC Index (24.8%) and Russell Emerging Europe Large Cap Index (23.7%).
The U.S. market as measured by the Russell 3000® Index (5.3%) underperformed the Russell Global ex-U.S. Index (14.2%). Even so, the Russell 3000 reflected the third consecutive positive month and a year-to-date gain through the end of May of 3.8%.
"Though the United States saw a modestly reduced rate of job losses, the ongoing slump in consumer demand, prospects of rising taxes, and three year highs in equity valuations caused investors to favor foreign equities by a margin of nearly nine percentage points," said Matthew Beardsley, associate portfolio manager at Russell. "This month's returns show that despite ongoing questions about the economic strength of European markets in particular and their path to a recovery, the region was up 13% on the basis of a rebound in prices of diversified financials and materials stocks."
Eight European countries ranked among the top 10 globally in terms of May returns, including six emerging markets such as Ukraine and Hungary.
"Emerging markets again took top honors as the best performing global region on the back of solid domestic demand in countries like China and Brazil as well as a potentially more business friendly Indian political landscape," Beardsley said.
The Russell Emerging Markets Index (18.2%) outperformed the Russell Developed Index (9.3%) by about nine percentage points.
Beardsley added that the return to rising commodity prices added strength to the energy and materials sectors, making areas such as gold and coal companies among the best performing in the world.
"The financial sector also continued its resurgence as banks benefited from a marginal improvement in underlying asset values (debt holdings) as well as reduced borrowing costs as depicted by the sharp fall in LIBOR," Beardsley said. "Though other sectors like technology and consumer discretionary were ahead in absolute terms, they lagged the broader market as valuations here have increased more quickly relative to other sectors in recent months."
| Russell Index sector returns for May |
| |
|
Russell 3000 Index |
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Russell Global ex-U.S. Index |
| Technology |
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2.9% |
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8.9% |
| Health Care |
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6.5% |
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9.2% |
| Consumer Discretionary |
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-0.2% |
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9.4% |
| Consumer Staples |
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6.7% |
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12.7% |
| Energy |
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11.5% |
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21.1% |
| Materials & Processing |
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6.1% |
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19.1% |
| Producer Durables |
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3.2% |
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12.1% |
| Financial Services |
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9.5% |
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16.2% |
| Utilities |
|
2% |
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11.2% |
For more returns data and real-time market analysis, 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 $136 billion in assets under management as of March 31, 2009, and serves individual, institutional and advisor clients in more than 40 countries. Russell Indexes have about $4 trillion in assets benchmarked to them. 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.
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