Russell Index alerts
Ahead of 2013 Russell Indexes reconstitution, a look back shows dynamic stocks helped drive a return of 26% for the Russell Developed Europe Index since 2012 reconstitution, while defensive stocks have led the Index year-to-date as of May 7.
May 9, 2013
The European equity market as reflected by the Russell Developed Europe Index returned 26% since the completion of the Russell Indexes 2012 annual reconstitution, the annual rebalancing of the Russell Global Indexes, on June 25, 2012 to May 7, 2013, with dynamic stocks as reflected by the Russell Developed Europe Dynamic Index significantly outperforming defensive stocks as reflected by the Russell Developed Europe Defensive Index for the same time period.
Since the start of 2013, defensive stocks have led within the Index, with the Russell Developed Europe Defensive Index outperforming the Russell Developed Europe Dynamic Index year-to-date as of May 7.
Within the Russell Developed Europe Index, Greece (40.1%) has been the top performing country constituent since last year’s Russell Indexes reconstitution, followed by Portugal (38.6%) and Spain (37.4%). Luxembourg (7.7%), the Netherlands (17.5%) and the United Kingdom (19.6%) have been the bottom performing country constituents in the Index for this time period.
"While we have seen positive performance in the European equity markets over the past year, the European economy continues to face challenges. And despite Mario Draghi's assertion at last week’s press conference that the ECB is looking at monetary actions to stimulate the European economy, we believe this is very much in a preliminary stage and substantial obstacles need to be overcome before a precise description on what will be done can be given," said Wouter Sturkenboom, investment strategist at Russell Investments Europe. "It is no surprise in this environment that, despite European markets continued upward march, defensive-oriented stocks have outpaced dynamic-oriented stocks within the Russell Developed Europe Index year-to-date, indicating more caution on the part of investors."
Russell Index returns
| Index / Index Country Constituent | 2013 YTD Return as of May 7 | Jun 25, 2012 through May 7, 2013 |
| Russell Developed Europe Index | 10.1% | 26.0% |
| Russell Developed Europe Defensive Index | 11.3% | 22.3% |
| Russell Developed Europe Dynamic Index | 8.9% | 30.4% |
| Austria | 1.7% | 31.1% |
| Switzerland | 16.1% | 31.6% |
| Germany | 8.1% | 30.7% |
| Spain | 12.2% | 37.4% |
| Finland | 11.7% | 32.0% |
| France | 8.9% | 29.0% |
| United Kingdom | 9.3% | 19.6% |
| Greece | 7.7% | 40.1% |
| Ireland | 15.2% | 29.3% |
| Italy | 5.8% | 25.6% |
| Luxembourg | -3.7% | 7.7% |
| Netherlands | 6.5% | 17.5% |
| Norway | 5.9% | 23.0% |
| Portugal | 15.1% | 38.6% |
| Sweden | 13.9% | 29.6% |
Source: Russell Investments. Returns are denominated in euros.
Within the Russell Developed Europe Index, country constituent Belgium has one constituent with more than a 50% weighting and Denmark has one constituent with more than a 40% weighting, so individual returns for these countries not included in this analysis.
Opinions expressed by Mr. Sturkenboom reflect market performance and observations as of May 7th, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
CORP-8466
Ahead of 2013 Russell Indexes reconstitution, a look back shows dynamic stocks helped drive a 24.7% return in the Russell 2000® Index since 2012 reconstitution. Defensive stocks narrowed the gap between defensive and dynamic stocks in the second quarter as the Index reached new all-time highs.
May 8, 2013
The U.S. small-cap equity market as reflected by the Russell 2000 Index returned 24.7% since the completion of the Russell Indexes 2012 annual reconstitution on June 25, 2012 through May 3, 2013, with dynamic stocks as reflected by the Russell 2000® Dynamic Index outperforming defensive stocks as reflected by the Russell 2000® Defensive Index for the same time period.
Within the Russell 2000 Index, while dynamic stocks have outpaced defensive stocks since last year’s reconstitution, defensive stocks have narrowed the gap in more recent time periods, including the second quarter of 2013 through May 3 where defensive stocks just slightly underperformed dynamic, and the week of April 29-May 3, in which defensive stocks actually outperformed dynamic stocks within the Index.
The Technology (+3.8%) and Energy (+3.7%) sectors showed the strongest returns in the week ended May 3, a week in which the Russell 2000 Index reached a new historical all-time high. Consumer sectors have led the Index for the year-to-date as of May 3, with the Consumer Discretionary (+17.4%) and Consumer Staples (+15.7%) sectors showing the strongest returns. The Consumer Discretionary sector was one of the stronger performing sectors in each period shown, even as leadership moved from dynamic to defensive stocks, highlighting the resilience of the U.S. consumer even as economic growth remains moderate.
"As we approach the closely watched annual rebalancing of the Russell Global Indexes and the U.S. equity market continues to reach new all-time highs, it is important for investors to have the most relevant and objective market proxy possible,” said David Koenig, CFA, FRM, investment strategist with Russell Indexes. “The push-and-pull scenario of defensive- and dynamic-oriented stocks within the Russell 2000 Index over the last year helps illustrate the need for investors to have an index analysis tool that accurately measures and tracks the changing dynamics of the market."
Russell Index returns
| Index / Index Sector | April 29 - May 3, 2013 | 2nd QTD a/o May 3 | 2013 YTD a/o May 3 | June 25, 2012 - May 3, 2013 |
| Russell 2000 Index | 2.1% | 0.4% | 12.8% | 24.7% |
| Russell 2000 Defensive Index | 2.2% | 0.3% | 12.0% | 23.7% |
| Russell 2000 Dynamic Index | 2.0% | 0.4% | 13.6% | 25.6% |
| Russell 2000 Consumer Discretionary sector | 2.3% | 4.2% | 17.4% | 33.6% |
| Russell 2000 Consumer Staples sector | 0.7% | 3.1% | 15.7% | 20.4% |
| Russell 2000 Energy sector | 3.7% | 0.0% | 11.5% | 28.1% |
| Russell 2000 Financial Services sector | 1.9% | 0.7% | 13.8% | 26.6% |
| Russell 2000 Healthcare sector | -0.2% | 0.3% | 15.1% | 14.5% |
| Russell 2000 Materials & Processing sector | 2.1% | -3.0% | 5.2% | 31.1% |
| Russell 2000 Producer Durables sector | 2.3% | -2.5% | 12.0% | 27.9% |
| Russell 2000 Technology sector | 3.8% | -1.1% | 8.8% | 16.4% |
| Russell 2000 Utilities sector | 1.6% | 4.7% | 14.7% | 22.1% |
Source: Russell Investments. Returns are denominated in US dollars.
Opinions expressed by Mr. Koenig reflect market performance and observations as of May 3rd, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance
The Russell 2000 Index reached a new all-time historical price level high of 954.42 as of market close on Friday, May 3rd. The previous all-time high for the Index was 953.07 on March 14th of this year.
CORP-8462
Ahead of 2013 Russell Indexes reconstitution, a look back shows dynamic stocks helped drive a 21.5% return in the Russell 1000® Index since 2012 reconstitution, while defensive stocks and sectors led year-to-date as of April 26
May 02, 2013
The U.S. large-cap equity market as reflected by the Russell 1000 Index returned 21.5% since the completion of the Russell Indexes 2012 annual reconstitution on June 25, 2012 through April 26, 2013, with dynamic stocks as reflected by the Russell 1000® Dynamic Index™ slightly outperforming defensive stocks as reflected by the Russell 1000® Defensive Index™ for the same time period.
Within the Russell 1000 Index, while dynamic stocks have outpaced defensive stocks since last year's reconstitution, defensive stocks have outperformed in more recent time periods, including the first quarter of 2013, 2013 year-to-date and for the month of April as of April 26. And traditionally defensive sectors have led for the year-to-date as of April 26, with the Healthcare (+20.1%), Consumer Staples (+18.1%) and Utilities (+17.5%) sectors showing the strongest returns.
Top performing companies with the Russell 1000 Index since the completion of the 2012 Russell Indexes reconstitution (June 25th) through April 26 include consumer discretionary company NetFlix (+217.6%), utility provider Clearwire Corp. (+186.7%) and consumer staples company Green Mountain Coffee Roasters Inc. (+173.6%). The bottom three performing companies within the Index for this same time period were materials & processing company Molycorp Inc. (-74.2%), consumer discretionary company ITT Educational Services Inc. (-68.05%) and energy provider Walter Energy Inc. (-62.1%).
"At the halfway point of earnings season, the U.S. equity market's return has been strong, but in an increasingly defensive way, as shown by the Russell 1000 Index," said Stephen Wood, Chief Market Strategist at Russell Investments. "The year-to-date outperformance of the Russell 1000 Defensive Index over the Russell 1000 Dynamic Index, combined with the strong performance by traditionally defensive sectors suggests an undercurrent of this broad market rally that has run hard in 2013. As such, we remain ‘guarded' - while simultaneously ‘observant' for opportunities; we think that a patient approach on the part of investors is warranted. We expect volatility and correlations, in the face of largely unchanged fundamentals, to present an environment that may favor security selection and a multi-asset approach."
Russell Index / Index sector returns
| Index / Index Sector | 2013 YTD a/o April 26th | 2nd Qtr To Date a/o April 26 | 1st Qtr 2013 | June 25, 2012 – April 26, 2013 |
| Russell 1000 Index | 11.8% | 0.8% | 11.0% | 21.5% |
| Russell 1000 Defensive Index | 14.0% | 1.9% | 11.9% | 20.3% |
| Russell 1000 Dynamic Index | 9.8% | -0.3% | 10.1% | 22.8% |
| Russell 1000 Consumer Discretionary sector | 14.6% | 2.5% | 11.9% | 28.4% |
| Russell 1000 Consumer Staples sector | 18.1% | 2.4% | 15.2% | 23.7% |
| Russell 1000 Energy sector | 7.6% | -2.6% | 10.4% | 21.1% |
| Russell 1000 Financial Services sector | 13.7% | 1.5% | 12.0% | 29.9% |
| Russell 1000 Healthcare sector | 20.1% | 3.5% | 16.0% | 30.2% |
| Russell 1000 Materials & Processing sector | 3.8% | -1.3% | 5.1% | 17.8% |
| Russell 1000 Producer Durables sector | 10.6% | -1.4% | 12.2% | 22.7% |
| Russell 1000 Technology sector | 1.6% | -2.1% | 3.8% | 2.7% |
| Russell 1000 Utilities sector | 17.5% | 5.0% | 11.9% | 18.2% |
Russell Index constituent returns
| Constituent | Sector | Return |
| Top 5 Russell 1000 Index Constituents: June 25, 2012 - April 26, 2013 |
| NetFlix Inc. | Consumer Discretionary | 217.6% |
| Clearwire Corp. | Utilities | 186.7% |
| Green Mountain Coffee Roasters Inc. | Consumer Staples | 173.6% |
| Constellation Brands Inc. | Consumer Staples | 146.7% |
| STARZ | Consumer Discretionary | 135.9% |
| Bottom 5 Russell 1000 Index Constituents: June 25, 2012 - April 26, 2013 |
| Molycorp Inc. | Materials & Processing | -74.2% |
| ITT Educational Services | Consumer Discretionary | -68.1% |
| Walter Energy Inc. | Energy | -62.1% |
| Allied Nevada Gold Corp. | Materials & Processing | -59.4% |
| Cliffs Natural Resources Inc. | Materials & Processing | -55.9% |
Source: Russell Investments. Returns are denominated in US dollars.
Opinions expressed by Mr. Wood reflect market performance and observations as of April 26th, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
CORP-8450
Central Banks: Russell Eurozone Defensive Index outperformed its dynamic counterpart as ECB prepares for a decision on interest rates
May 02, 2013
Eurozone investors appear to have continued to invest defensively in 2013, highlighted by the Russell Eurozone Defensive Index which has outperformed the Russell Eurozone Dynamic Index by nearly 3% year-to-date as of April 30. As the European Central Bank (ECB) prepares to meet today in Bratislava, with a decision expected on interest rates, the defensive component of the Russell Eurozone Index has continued to lead performance.
Within the Russell Eurozone Index, Portugal (13.3%) has been the top performing country constituent year-to-date as of April 30, followed by Ireland (12.1%) and Finland (9.3%). Luxembourg (-5.3%), Austria (1.6%) and Italy (3.3%) have been the bottom performing country constituents in the Index year-to-date as of April 30.
"We continue to muddle through in the Eurozone as evidenced by recent less than stellar economic reports, with inflation hitting a three-year low and unemployment in Europe hitting new records. All this helps feed speculation that the ECB will cut interest rates at its upcoming meeting," said Wouter Sturkenboom, investment strategist at Russell Investments Europe. "And even though Russell Eurozone Index performance has been positive year-to-date, Russell Eurozone Defensive Index returns appear to indicate a continued cautious stance by Eurozone investors and it remains to be seen whether ECB monetary policy actions will be impactful enough for the markets."
Russell Indexes Returns
| Index / Index Country Constituent | 2013 YTD Return as of Apr. 30 |
| Russell Eurozone Index | 5.9% |
| Russell Eurozone Defensive Index | 7.5% |
| Russell Eurozone Dynamic Index | 4.6% |
| Portugal | 13.3% |
| Ireland | 12.1% |
| Finland | 9.3% |
| Spain | 8.0% |
| France | 6.6% |
| Greece | 5.9% |
| Germany | 4.8% |
| Netherlands | 4.6% |
| Italy | 3.3% |
| Austria | 1.6% |
| Luxembourg | -5.3% |
Source: Russell Investments. Returns are denominated in euros.
Within the Russell Eurozone Index, country constituent Belgium has one constituent with more than a 50% weighting, so its individual performance is not included in this analysis.
Opinions expressed by Mr. Sturkenboom reflect market performance and observations as of April 30th, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
CORP-8443
Weighted down by BRICs: Russell Emerging Markets Index indicates weak equity market performance in country constituents Brazil, Russia, India & China YTD as of 4/23
April 25, 2013
The Russell Emerging Markets Index is down (-1.1%) year-to-date as of April 23rd. One contributing factor may be the performance of its BRIC country constituents Brazil, Russia, India & China, all which have had negative year-to-date returns. And all BRIC country constituents except Brazil underperformed the Index for this same time period. Other negative year-to-date country constituents within the Index as of April 23rd included Korea (-6.4%), Colombia (-6.8%), Egypt (-9.0%), South Africa (-9.4%) and Poland (-10.5%).
On the other side of the spectrum, country constituents the United Arab Emirates (+31.7%), the Philippines (+22.5%) and Thailand (+20.1%) have all enjoyed strong returns year-to-date as of April 23rd relative to the Index.
"The BRIC nations have faced challenges, notably more mixed economic data out of China where the new political regime looks to establish credibility. And Korea's performance thus far this year as shown by the Russell Emerging Markets Index appears to demonstrate the role that political uncertainty and fluctuations in global currencies can play in local market sentiment and investment performance," said Scott Crawshaw, emerging markets portfolio manager for Russell Investments. "And while emerging markets can present additional risks not found in developed markets, it is important to remember the important role these markets can play within a multi-asset portfolio from a diversification and return perspective. When you are seeking exposure to emerging markets, it is important to work with a global asset manager with the insight and capabilities to help you evaluate these opportunities and put them into a broader multi-asset portfolio context."
Russell Indexes performance
| Index / Index Country | 2013 YTD as of April 23rd |
| Russell Emerging Markets Index | -1.1% |
| United Arab Emirates | 31.7% |
| Philippines | 22.5% |
| Thailand | 20.1% |
| Indonesia | 17.5% |
| Turkey | 9.3% |
| Mexico | 7.9% |
| Malaysia | 3.9% |
| Taiwan | 2.5% |
| Chile | 2.2% |
| Morocco | 0.1% |
| Brazil | -0.2% |
| India | -1.4% |
| China | -3.7% |
| Korea | -6.4% |
| Colombia | -6.8% |
| Egypt | -9.0% |
| South Africa | -9.4% |
| Russia | -10.4% |
| Poland | -10.5% |
Source: Russell Investments. Returns are euro-denominated.
Russell Indexes to Reclassify Greece From Developed to Emerging Market
On March 1st, 2013, Russell Indexes announced that it will reclassify Greece within the Russell Global Indexes from a developed market country to an emerging market country, effective at the conclusion of its annual indexes reconstitution in late June. This conclusion by Russell Indexes resulted from a three-year market risk review process, as prescribed by Russell’s methodology, in which Greece did not meet macro- and operational risk criteria for developed market status, but did meet classification criteria for inclusion in emerging markets.
You can find more background on the analysis which led to the reclassification of Greece to an emerging market in a paper entitled Greece: Re-emerged and a video, available on the Reconstitution webpage.
Russell Emerging Markets Index country constituents Hungary, the Czech Republic and Peru had less than 10 constituents or constituents with more than 30% weight in the index so were not included in the Individual breakdown.
Opinions expressed by Mr. Crawshaw reflect market performance and observations as of April 23rd, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than US and longer-established non-US markets.
CORP-8423
Low Volatility: Russell 1000® & Russell 2000® Low Volatility Indexes delivered lower variability & stronger returns relative to parent indexes
April 25, 2013
The Russell Low Volatility Indexes, U.S. large- and small-cap indexes that seek to deliver lower volatility of returns than their parent Russell 1000® and Russell 2000® Indexes, have delivered on their objective in various time periods over the past year.
The Russell 1000® & Russell 2000® Low Volatility Indexes aim to offer lower volatility as well as a competitive return to their parent index via an objective, transparent construction approach designed to deliver focused exposure to stocks with low total return variability. Lower volatility stocks are given more weight within the index.
- The Russell 1000 Low Volatility Index had a stronger relative return with lower relative standard deviation than the Russell 1000 Index for the quarter-to-date, year-to-date and one year as of 4/22, as well as for the first quarter.
- The Russell 2000 Low Volatility Index had a stronger relative return with lower relative standard deviation than the Russell 2000 Index for the quarter-to-date, year-to-date and one year as of 4/22.
"Concern about market volatility in recent years has spurred interest in indexes that focus on stocks exhibiting lower historical variability of returns than their parent indexes," said David Koenig, CFA, FRM, investment strategist with Russell Indexes. "In today's environment of heightened uncertainty, investors have utilized low volatility strategies in portfolio construction as a way to help manage portfolio volatility while maintaining equity market participation."
Russell Index Returns
| Index | 2nd QTD
as of 4/22 | 1st Quarter 2013 | 2013 YTD
as of 4/22 | One Year
as of 4/22 |
| Russell 1000 Index | -0.5% | 11.0% | 10.4% | 16.1% |
| Russell 1000 Low Volatility Index | 0.9% | 13.4% | 14.5% | 20.4% |
| Russell 2000 Index | -3.8% | 12.4% | 8.1% | 15.5% |
| Russell 2000 Low Volatility Index | -2.3% | 12.0% | 9.5% | 17.3% |
Russell Index Standard Deviations
| Index | 2nd QTD
as of 4/22 | 1st Quarter 2013 | 2013 YTD
as of 4/22 | One Year
as of 4/22 |
| Russell 1000 Index | 15.9% | 10.1% | 11.6% | 12.9% |
| Russell 1000 Low Volatility Index | 14.3% | 9.3% | 10.5% | 11.0% |
| Russell 2000 Index | 22.6% | 12.0% | 15.2% | 16.4% |
| Russell 2000 Low Volatility Index | 19.1% | 11.2% | 13.3% | 13.8% |
Source: Russell Investments. Returns are denominated in US dollars.
Standard deviation for all time periods is based on annualized standard deviation of daily index returns.
Opinions expressed by Mr. Koenig reflect market performance and observations as of April 22nd, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
CORP-8426
The Russell Emerging Markets ex-GCC Index helps indicate that political uncertainty may have taken its toll on market returns in South Korea, which has only returned (-6.1%) year-to-date within the Index. In comparison, the South Korea country constituent outperformed the Index in 2012 with an 18.1% return. The Russell Emerging Markets ex-GCC Index has returned (-2.4%) year-to-date as of April 16th after returning 17.3% in 2012.
Russell Emerging Markets ex-GCC Index country constituents the Philippines (18.0%), Thailand (16.3%) and Indonesia (15.6%) have led the index in 2013, all coming off positive returns in 2012. South Africa (-10.3%), Russia (-9.2%) and Egypt (-9.0%) have been at the bottom of the Index in terms of YTD performance.
"The wide variation of performance among emerging equity markets as defined by the Russell Emerging Markets ex-GCC Index since the beginning of the year and relative to 2012 helps to illustrate the diverse nature of investment opportunities and risks across less mature equity markets. And South Korea's equity market downturn thus far this year appears to demonstrate the role that political uncertainty and fluctuations in global currencies can play in local market sentiment and investment performance," said Scott Crawshaw, emerging markets portfolio manager for Russell Investments. "And while emerging markets can present additional risks not found in developed markets, it is important to remember the important role these markets can play within a multi-asset portfolio from a diversification and return perspective. And when you are seeking exposure to emerging markets, it is important to work with an active manager with the insight to help you evaluate these opportunities and put them into a broader multi-asset context."
Russell Index Returns
| Index / Index Country | 2012 | 2013 YTD as of April 16th |
|---|
| Russell Emerging Markets ex-GCC Index | 17.3% | -2.4% |
| Brazil | 3.1% | -1.8% |
| Chile | 12.0% | 1.3% |
| China | 18.4% | -5.2% |
| Colombia | 29.3% | -8.1% |
| Eqypt | 45.2% | -9.0% |
| Indonesia | 5.3% | 15.6% |
| India | 23.8% | -3.9% |
| South Korea | 18.1% | -6.1% |
| Morocco | -11.8% | 1.0% |
| Mexico | 31.4% | 7.4% |
| Malaysia | 14.9% | 3.7% |
| Philippines | 44.5% | 18.0% |
| Poland | 41.8% | -7.2% |
| Russia | 11.2% | -9.2% |
| Thailand | 42.6% | 16.3% |
| Turkey | 61.3% | 10.0% |
| Taiwan | 16.6% | -0.6% |
| South Africa | 17.4% | -10.3% |
Source: Russell Investments. Returns are euro-denominated.
Russell Indexes to Reclassify Greece From Developed to Emerging Market
On March 1st, 2013, Russell Indexes announced that it will reclassify Greece within the Russell Global Indexes from a developed market country to an emerging market country, effective at the conclusion of its annual indexes reconstitution in late June. This conclusion by Russell Indexes resulted from a three-year market risk review process, as prescribed by Russell’s methodology, in which Greece did not meet macro- and operational risk criteria for developed market status, but did meet classification criteria for inclusion in emerging markets.
You can find more background on the analysis which led to the reclassification of Greece to an emerging market in a paper entitled Greece: Re-emerged and a video, available on the Reconstitution webpage.
Russell Emerging Markets Index country constituents Hungary, the Czech Republic and Peru had less than 10 constituents or constituents with more than 30% weight in the index so were not included in the Individual breakdown.
Opinions expressed by Mr. Crawshaw reflect market performance and observations as of April 16th, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than US and longer-established non-US markets.
CORP-8411
The U.S. equity market continues to surge in 2013 as illustrated by the rise of the Russell 1000® Index of large-cap U.S. stocks 12.3% and the Russell 2000® Index of small-cap U.S. stocks 11.4% year-to-date as of April 12th. However, a closer look at the Russell Defensive and Dynamic Indexes performance within the indexes for this same time period reveals two opposite performance stories.
The Russell 2000® Dynamic Index, which identifies and measures more dynamic-oriented stocks within the Russell 2000® Index of small-cap U.S. stocks, outperformed both its Defensive counterpart and the Russell 2000® Index for the year-to-date as of April 12th.
For large-cap U.S. stocks, the situation is reversed. The Russell 1000® Defensive Index, which identifies and measures more defensive-oriented stocks within the Russell 1000® Index of large-cap U.S. stocks, outperformed both its Dynamic counterpart and the Russell 1000® Index for the year-to-date as of April 12th.
The Russell Stability Indexes™ are style-based benchmarks, created from existing Russell Indexes, which identify stocks based on sensitivity to economic cycles, credit cycles and market volatility, referred to as stability. The more stable half of the market is called Defensive and the less stable half of the market is called Dynamic.
"One of the macroeconomic messages so far in 2013 is that the U.S. economic expansion appears to be quite resilient in the face of fiscal tightening, ongoing recession in Europe and somewhat disappointing growth in emerging markets, perhaps putting an end to the risk-on, risk-off roller coaster of the past three years. Within the U.S. equity market, however, it appears that strong performing small-cap stocks have shared a different set of characteristics than strong performing large-cap stocks. Small-cap markets appear to have rewarded companies that have taken on debt to grow amid historically low interest rates. In an environment in which the all-encompassing risk-on, risk-off tide may no longer swamp firm-specific volatility, large-cap markets, on the other hand, appear to have rewarded companies that show lower firm-specific volatility of price and earnings," said Mike Dueker, chief economist for Russell Investments. The result is that Defensive stocks have outperformed among Russell 1000 firms and Dynamic stocks have outperformed among Russell 2000 firms.
"Oftentimes when a market is moving in lockstep one direction or the other, a broad set of market indexes may not tell the whole story," said David Koenig, CFA, FRM, investment strategist with Russell Indexes. "The additional analysis that is possible through the Russell Stability Indexes helps to ensure a deeper level of analysis, understanding and insight into what may be driving the U.S. equity market."
Russell Index Returns
| Index | Year-To-Date as of Apr 12 |
|---|
| Russell 1000® Index | 12.3% |
| Russell 1000® Defensive Index | 14.2% |
| Russell 1000® Dynamic Index | 10.5% |
| Russell 2000® Index | 11.4% |
| Russell 2000® Defensive Index | 10.7% |
| Russell 2000® Dynamic Index | 12.1% |
Source: Russell Investments.
Opinions expressed by Mr. Dueker and Mr. Koenig reflect market performance and observations as of April 12th, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance
CORP-8407
Russell Global Index
The Russell Global Index measures the performance of the global equity market based on all investable equity securities, and is constructed to provide a comprehensive and unbiased barometer for the global segment. The index includes more than 10,000 securities in 47 countries, and covers 98% of the investable global market. All securities in the Russell Global Index are classified according to size, region, country and sector; as a result the index can be segmented into more than 300 distinct benchmarks.
Access further information and daily returns for the main components of the Russell Global Index.
Indexes are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Russell's publication of the Indexes or Index constituents in no way suggests or implies a representation or opinion by Russell as to the attractiveness of investing in a particular security. Inclusion of a security in an Index is not a promotion, sponsorship or endorsement of a security by Russell and Russell makes no representation, warranty or guarantee with respect to the performance of any security included in a Russell Index.
Index returns are US dollar-denominated unless otherwise specified.
This is not an offer, solicitation, or recommendation to purchase any security or the services of any organization. Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness are not guaranteed. Russell Investments reserves the right at any time and without notice to change, amend, or cease publishing the information. It has been prepared solely for informative purposes. It is made available on an "as is" basis. Russell Investments does not make any warranty or representation regarding the information. Without prior written permission from Russell Investments, it may not be reproduced, in whole or in part, in any form, other than for your own personal, non-commercial use.
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.
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