Microcaps shine in July Financial services sector tops all others as energy stocks stall August 1, 2008 — The U.S. broad-market Russell 3000® Index reflected a slight decline for the month of July while two sectors in the index traded places as the best and worst performing. The financial services sector in the Russell 3000 outperformed all others for the month of July with a 6.4% increase though it still showed a year-to-date loss of 21.3%. Moving in the other direction, the other energy sector suffered an 18.1% loss for the month, but maintained a 2.2% year-to-date increase. "We saw some strong crosscurrents among sector returns for July," said Christian Anderson, associate portfolio analyst at Russell Investments. "There were extremely volatile changes in leadership between the energy and financial services sectors." This leadership rotation also gave a boost to value investors. In a complete reversal from the month of June, value stocks at every market capitalization tier outperformed their growth counterparts. In the small-cap segment, for example, the Russell 2000® Value Index outperformed the Russell 2000® Growth Index by nearly three percentage points. Among the different market capitalization tiers measured by Russell's family of U.S. indexes, the Russell Microcap® Index (4.7%) showed the largest increase for the month. "The leader among the entire family of U.S. indexes for July was the Russell Microcap Value Index," said Anderson. "Even with a gain of 5.7% for the month, it still has year-to-date loss of 9.7%." The small-cap segment also outperformed the large-cap segment to widen it's year-to-date lead. The Russell 2000® Index reflected a gain of 3.7% for the month as the Russell 1000® Index reflected a decline of 1.2%. Both indexes showed a negative year-to-date return, but the Russell 2000 led by six percentage points for the seven-month period. In the Russell 1000, 56 financial services firms gained more than 10% for the month including Bank of America (37.8%) and Wells Fargo (27.5%). By contrast, 67 stocks in the other energy sector lost more than 20% for the month, including 23 crude oil producers. The top three performing large-cap stocks for the month are AMR Corp. (76.4%), Philadelphia Consolidated (72.1%) and Rohm and Haas (61.5%). In the Russell 2000, 20 financial services firms surged by more than 40% for the month of July, including UCBH Holdings (100.4%), Ambac Financial Group (88.1%) and Sterling Financial (80.7%). Sector returns for July     Russell 1000   Russell 2000   Russell 3000 Autos & Transportation   4.1%   9.6%   4.8% Consumer Discretionary & Services   -1.2%   2.8%   -0.9% Consumer Staples   4.7%   4.2%   4.7% Financial Services   6.2%   8.0%   6.4% Health Care   5.0%   11.5%   5.5% Integrated Oils   -11.3%   -23.5%   -11.4% Materials & Processing   -5.0%   2.7%   -4.1% Other Energy   -18.2%   -17%   -18.1% Producer Durables   -0.9%   4.3%   -0.3% Technology   -0.5%   3.1%   -0.2% Utilities   -5.1%   3.1%   -4.7% 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-5521			Past reports View more Russell Indexes commentaries and articles   Printer friendly version of this page

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