SOURCE: Russell Investments

Russell Investments

May 02, 2013 09:19 ET

Central Banks: Russell Eurozone Defensive Index Outperformed Its Dynamic Counterpart as ECB Prepares for a Decision on Interest Rates

SEATTLE, WA--(Marketwired - May 2, 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 Index Returns

Index / Index Country Constituent 2013 Year-to-Date Return as of April 30th
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.

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 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

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.