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Global stocks fall 8.3% in June
Energy-related sectors remained hot amid market sell off
July 3, 2008 — The U.S. broad-market Russell 3000® Index and the Russell Global Index each reflected a decline of 8.3% for the month of June — the worst month for the U.S. broad market since September of 2002 — and both benchmarks showed double-digit losses for the first half of 2008.
Every market capitalization tier in the U.S. market took a hit, ranging from -6% for the small-cap Russell 2000® Growth Index to -10.9% for the Russell Microcap® Value Index. The year-to-date returns through the end of June paint a similarly negative picture, ranging from -6.8% for the Russell Midcap® Growth Index to -16.4% for the Russell Microcap® Growth Index.
Though overwhelmingly negative, the month of June did offer some disparity in returns, particularly for style investors. Growth stocks outperformed value stocks at every market capitalization tier, particularly in the small-cap and micro-cap segments. The Russell 2000® Growth Index, for example, outperformed the Russell 2000® Value Index by nearly 3.6 percentage points for the month.
In addition, the integrated oils and other energy sectors in the Russell 3000 continued to boost the index with positive returns for the month of June that added to their already strong year-to-date gains. For the first six months of 2008, the other energy sector jumped 27.6% and integrated oils increased 12.9%.
By contrast, the Russell 3000's financial services sector fell 16.7% for June and at month's end showed a year-to-date decline of 15.4%. The contrary performance of many financial services and energy stocks resulted in some repositioning in the recently concluded index reconstitution process.
"The strongest performing sector, Other Energy, had the largest portion graduating to the large-cap Russell 1000® Index," said Steve Swartley, senior research analyst at Russell Investment. "Moving in the opposite direction, the financial services sector was by far the worst-performing in the Russell 1000 and, as a result, showed the largest increase in the newly reconstituted Russell 2000® Index."
In the Russell 1000, 15 of the 20 top-performing stocks for the month of June are in the energy sector, including Petrohawk Energy (57.6%) in the top spot. It was followed by several coal stocks, including Patriot Coal (41.8%) and Foundation Coal (32.8%). On the other end of the scale, 13 companies in the financial services sector ranked among the bottom 20 for the month of June.
In the Russell 2000, a biopharmaceutical stock (Tercica, 107.3%) outperformed all others and four crude producers ranked among the top 10, including Goodrich Petroleum (94.6%) and Oilsands Quest (42.2%).
Looking globally, the Russell Developed Index (-8%) outperformed the Russell Emerging Markets Index (-10.4%). Within emerging markets, the Russell Latin America (-8.1%) and Russell Emerging EMEA Index (-7%) outperformed the Russell Emerging Asia Index (-12.8%).
| Sector returns for 2Q08 |
| |
|
Russell 1000 |
|
Russell 2000 |
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Russell 3000 |
| Technology |
|
2.6% |
|
2.8% |
|
2.6% |
| Health Care |
|
-1.1% |
|
-0.9% |
|
-1.1% |
| Consumer Discretionary & Services |
|
-3.7% |
|
-5.4% |
|
-3.9% |
| Consumer Staples |
|
-7.5% |
|
-8.7% |
|
-7.5% |
| Integrated Oils |
|
12.9% |
|
41.9% |
|
12.9% |
| Other Energy |
|
25.6% |
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47.1% |
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27.6% |
| Materials & Processing |
|
5.1% |
|
7.7% |
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5.5% |
| Producer Durables |
|
-3.5% |
|
1.7% |
|
-3.0% |
| Autos & Transportation |
|
-3% |
|
-10.5% |
|
-3.9% |
| Financial Services |
|
-15.7% |
|
-12.5% |
|
-15.4% |
| Utilities |
|
2.9% |
|
2.3% |
|
2.9% |
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 $213 billion in assets under management as of March 31, 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-5493
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Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
Indexes are unmanaged and cannot by invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.
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