Small Caps Spring Ahead in March
 April 4, 2006 — The small-cap Russell 2000® Index reflected a 4.85% gain in March and finished the first quarter of 2006 with a 13.94% increase. The positive performance was evenly distributed among growth and value stocks as the Russell 2000® Growth Index led Russell's family of 24 U.S. indexes with a 4.86% increase, while the Russell 2000® Value Index gained 4.84%.
"Small caps bounced back in March, led by some growth names, to post relatively good returns across the board," said Chris Tessin, associate portfolio manager. "For the first quarter, the gap between small caps and large caps was the widest we've seen since the fourth quarter of 2001."
In the tug-of-war between the Russell 2000 (13.9%) and the large-cap Russell 1000® Index (4.5%), the small-cap index led the first quarter by a margin of 9.4 percentage points.
Good news in terms of stock performance in March was not confined to small caps. Every segment of the market, as reflected by Russell indexes, gained ground in March and added to a positive year-to-date performance for 2006. The Russell Microcap Index™, for example, nearly kept up with the small-cap indexes with a 4.5% increase in March and 14.1% for the first quarter.
The largest U.S. stocks in terms of market capitalization, as measured by the Russell Top 50™ Index, turned in the smallest gain (0.79%) for the month.
Among the 12 sectors in Russell indexes, integrated oils and other energy showed new-found strength in March, especially in the small-cap arena. Those two sectors outperformed all others in the Russell 2000 with a 12.4% increase for integrated oils and 7.4% for other energy. In the broad-market Russell 3000® Index, though, materials & processing (5.06%) outperformed integrated oils and rivaled the performance of other energy (5.1%).
The technology sector also continues to show some spark in 2006, returning 18.8% year-to-date in the Russell 2000 and 5.6% in the Russell 1000.
Seven of the 10 top-performing stocks in the Russell 2000 are in the technology sector, including Finisar (78.1%), Broadwing (64.5%), Cbeyond Communications (64.2%), and Endwave (57.6%). In the Russell 1000, the two top-performing stocks for March are in the technology sector: JDS Uniphase (37.2%) and Akamai Technologies (24.1%).
"Some small technology stocks, particularly in communications and software industries, gave investors some notable positive returns for March," Tessin said. "The Russell 2000 also received a boost from sizeable gains among stocks in the materials & processing sector, particularly in building materials and chemicals."
In the Russell 3000, nearly 70% of stocks increased in value in March, including 129 stocks that gave investors a return greater than 20% for the month.
View daily total returns for all Russell indexes.
| RUSSELL INDEXES TOTAL RETURNS (%) |
|
|
|
|
| |
|
March |
|
Q106 |
| Russell 3000® Index |
|
1.73% |
|
5.31% |
| Russell 1000® Index |
|
1.42% |
|
4.49% |
| Russell 2000® Index |
|
4.85% |
|
13.94% |
| Russell 2500™ Index |
|
3.89% |
|
11.14% |
| Russell Midcap® Index |
|
2.48% |
|
7.61% |
| Russell Top 200® Index |
|
0.97% |
|
3.22% |
| Russell Top 50® Index |
|
0.79% |
|
2.51% |
| Russell Microcap™ Index |
|
4.53% |
|
14.14% |
| Russell 3000® Value Index |
|
1.67% |
|
6.59% |
| Russell 3000® Growth Index |
|
1.79% |
|
4.07% |
| Russell 1000® Value Index |
|
1.35% |
|
5.93% |
| Russell 1000® Growth Index |
|
1.48% |
|
3.09% |
| Russell 2000® Value Index |
|
4.84% |
|
13.51% |
| Russell 2000® Growth Index |
|
4.86% |
|
14.36% |
| Russell 2500™ Value Index |
|
3.51% |
|
10.47% |
| Russell 2500™ Growth Index |
|
4.27% |
|
11.83% |
| Russell Midcap® Value Index |
|
2.18% |
|
7.62% |
| Russell Midcap® Growth Index |
|
2.79% |
|
7.61% |
| Russell Top 200® Value Index |
|
1.00% |
|
5.21% |
| Russell Top 200® Growth Index |
|
0.95% |
|
1.35% |
March 2006
SECTOR PERFORMANCE |
|
|
|
|
| |
|
Russell
1000 |
|
Russell 2000 |
| Technology |
|
2.26% |
|
6.33% |
| Health Care |
|
-1.16% |
|
1.61% |
| Consumer Discretionary & Services |
|
1.89% |
|
5.19% |
| Consumer Staples |
|
-0.14% |
|
4.72% |
| Integrated Oils |
|
2.88% |
|
12.45% |
| Other Energy |
|
4.73% |
|
7.36% |
| Materials & Processing |
|
4.29% |
|
7.94% |
| Producer Durables |
|
1.91% |
|
4.89% |
| Autos & Transportation |
|
4.23% |
|
1.88% |
| Financial Services |
|
0.90% |
|
3.90% |
| Utilities |
|
-0.78% |
|
4.07% |
About Russell: Russell Investment Group, a global leader in multi-manager investing, provides investment products and services in more than 40 countries. Russell manages more than $155 billion in assets and advises clients worldwide representing more than $2.4 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Sydney, Singapore, Auckland and Tokyo.
Russell employs its indexes to objectively evaluate investment managers for multi-manager funds and other investment services. More than $3.8 trillion in assets are benchmarked to Russell indexes.
Russell Investment Group is a registered trade name of Frank Russell Company, a Washington, USA corporation, which operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.
Frank Russell Company 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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