Investors Vote for Small Caps in October
 November 1, 2006 — Even as mega-cap indexes such as the Russell Top 50™ Index hit all-time highs in October, it was the Russell Microcap™ Growth Index (6.8%) and Russell 2000® Growth Index (6.5%) that turned in the best performance for the month.
"As the record-setting Dow grabbed most of the headlines in October, investors turned once again toward small caps and micro caps," said Steve Swartley, senior manager research analyst. "All of Russell's benchmarks that measure the various small-cap and micro-cap segments of the market, including growth and value, outperformed every large-cap and mid-cap index for the month."
While the U.S. market, as reflected by Russell's comprehensive family of 26 equity indexes, showed some disparity among capitalization tiers in October, each Russell index reflected at least a 3% gain for the month. The month's positive equity returns pushed the broad-market Russell 3000® Index to a year-to-date increase of 11.9% and the best-performing Russell 2000® Value Index to a sizeable 19% year-to-date gain for 2006.
The month of October also saw a reversal in leadership among small caps and large caps as the Russell 2000® Index outperformed the Russell 1000® Index by 2.4 percentage points. For the year, the Russell 2000 now leads by 3.3 percentage points, and the index is approaching its historic record value which was set in May of this year.
"The Russell 2000 and Russell 1000 have outperformed the other for five months each in 2006," said Swartley. "Every time the large-cap segment shows momentum for a month or so, the small-cap segment takes the lead again the following month."
Swartley added that Russell 2000 sectors that had lagged through the summer helped drive performance in October, including materials and processing (7.9%) auto and transportation (7.3%), health care (7%) and consumer discretionary (6.8%). The integrated oils sector (9.5%) led the pack again in October, while financial services (3.8%), consumer staples (3.9%) and technology (5.5%) didn't fare as well.
The Russell Microcap™ Index, which had dipped 2.4% for the third quarter, surged 6% for the month of October. The Russell Microcap Growth outperformed the Russell Microcap Value by 1.5 percentage points for October, but the value index leads year-to-date by 8.8 percentage points.
In the Russell 1000, 75% of the stocks gained value in September and 22 surged more than 20% for the month. The top-performing stocks were JLG Industries (39.6%), American Power Conversion (37.7%) and UAL Corporation (35.3%).
In the Russell 2000, 155 stocks gained more than 20% for the month with Sirna Therapeutics (126.8%), New River Pharmaceuticals (97.7%), Bally Total Fitness (86.1%) and Connetics Corporation (56.3%) leading the way. Four of the five top-performing stocks for the month were in the health care sector.
For additional performance figures on Russell's indexes and the user-friendly Russell index returns calculator, please visit: www.russell.com/indexes.
| RUSSELL INDEXES TOTAL RETURNS (%) |
|
|
|
|
| |
|
October |
|
YTD |
| Russell 3000® Index |
|
3.60% |
|
11.91% |
| Russell 1000® Index |
|
3.40% |
|
11.62% |
| Russell 2000® Index |
|
5.76% |
|
14.95% |
| Russell 2500™ Index |
|
4.81% |
|
12.00% |
| Russell Midcap® Index |
|
3.94% |
|
11.27% |
| Russell Top 200® Index |
|
3.18% |
|
11.76% |
| Russell Top 50® Index |
|
3.50% |
|
13.65% |
| Russell Microcap™ Index |
|
5.99% |
|
12.02% |
| Russell 3000® Value Index |
|
3.44% |
|
17.07% |
| Russell 3000® Growth Index |
|
3.76% |
|
6.98% |
| Russell 1000® Value Index |
|
3.27% |
|
16.89% |
| Russell 1000® Growth Index |
|
3.52% |
|
6.59% |
| Russell 2000® Value Index |
|
5.09% |
|
19.02% |
| Russell 2000® Growth Index |
|
6.48% |
|
10.96% |
| Russell 2500™ Value Index |
|
4.68% |
|
15.27% |
| Russell 2500™ Growth Index |
|
4.93% |
|
8.82% |
| Russell Midcap® Value Index |
|
4.05% |
|
15.29% |
| Russell Midcap® Growth Index |
|
3.84% |
|
7.44% |
| Russell Top 200® Value Index |
|
2.99% |
|
17.49% |
| Russell Top 200® Growth Index |
|
3.38% |
|
6.39% |
October 2006
SECTOR PERFORMANCE |
|
|
|
|
| |
|
Russell 2000 |
|
Russell 1000 |
| Technology |
|
5.46% |
|
3.04% |
| Health Care |
|
6.98% |
|
0.47% |
| Consumer Discretionary & Services |
|
6.76% |
|
6.07% |
| Consumer Staples |
|
3.90% |
|
2.15% |
| Integrated Oils |
|
9.47% |
|
4.85% |
| Other Energy |
|
7.45% |
|
5.93% |
| Materials & Processing |
|
7.93% |
|
5.51% |
| Producer Durables |
|
4.92% |
|
2.88% |
| Autos & Transportation |
|
7.27% |
|
5.82% |
| Financial Services |
|
3.81% |
|
2.62% |
| Utilities |
|
4.55% |
|
5.34% |
About Russell: Russell Investment Group, a global leader in multi-manager investing, provides investment products and services in 44 countries. Russell manages more than $181 billion in assets and advises clients worldwide representing more than $2.4 trillion. Founded in 1936, Russell 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 the industry-leading Russell indexes.
Russell Investment Group, a Washington, USA corporation, operates through subsidiaries worldwide. Russell Investment Group is a subsidiary of The Northwestern Mutual Life Insurance Company.
Russell Investment Group 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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