SOURCE: Russell Investments

Russell Investments

May 09, 2013 10:04 ET

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

SEATTLE, WA--(Marketwired - 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 Year-to-Date Return
as of May 7
  June 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.

Please note: 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.

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.

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.

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.