SOURCE: Russell Investments

Russell Investments

January 16, 2015 14:57 ET

Emerging Equity Markets Generated Positive Returns Despite Energy Drag: Russell Indexes

Falling Oil Prices Good News for Some Emerging Markets, Bad News for Others, According to Russell Emerging Markets Expert

SEATTLE, WA--(Marketwired - Jan 16, 2015) -  The Russell Emerging Markets Index gained 2.6% year-to-date as of 14 January 2015. This followed a 4.4% increase for the Index in the second half of 2014.

The impact of falling oil prices impacted sector performance. Within the Index, the Energy (+0.7%) and Materials & Processing (+1.9%) sectors were at the bottom of the pack in 2015 year-to-date. This followed losses of (-20.2%) and (-5.6%), respectively, in the second half of 2014.

Oil exporter Russia which was the worst performing country in the index for the second half of 2014 with a (-36.9%) loss, has rebounded this year, generating 3.8% as of 14 January 2015. This year Turkey has been the strongest performer returning 7.4%.

Gustavo Galindo -
Senior Emerging Markets Portfolio Manager, Russell Investments
"Emerging markets comprise a diverse set of markets and economies. No longer can investors take a broad brush approach when investing in emerging markets, as the returns we saw in the second half of 2014 and so far in 2015 show that we are seeing a divergence in performance at a country and sector level."

"While falling oil prices have certainly had an impact on the region, the impact is not all bad. In the case of certain oil importing markets such as India, China and Turkey, the impact has actually been good. We continue to see value in certain, but not all, emerging markets, reinforcing the importance of a fundamental, bottom-up approach." 

For more information on the Russell Emerging Markets Index, go to the Russell Investments website.

Russell Emerging Markets Index Sector & Country Returns   YTD 2015 a/o 14 January   Second Half 2014
Russell Emerging Markets Index   2.6%   4.4%
Russell Emerging Markets Index - Health Care Sector   4.1%   19.0%
Russell Emerging Markets Index - Consumer Discretionary Sector   3.9%   3.8%
Russell Emerging Markets Index - Consumer Staples Sector   3.6%   3.2%
Russell Emerging Markets Index - Technology Sector   3.3%   8.6%
Russell Emerging Markets Index - Producer Durables Sector   2.6%   6.6%
Russell Emerging Markets Index - Utilities Sector   2.4%   7.9%
Russell Emerging Markets Index - Financial Services Sector   2.0%   12.7%
Russell Emerging Markets Index - Materials & Processing Sector   1.9%   -5.6%
Russell Emerging Markets Index - Energy Sector   0.7%   -20.2%
 
Russell Emerging Markets Index - Turkey   7.4%   11.0%
Russell Emerging Markets Index - Philippines   6.2%   16.6%
Russell Emerging Markets Index - Korea   4.9%   -2.2%
Russell Emerging Markets Index - Thailand   4.6%   14.0%
Russell Emerging Markets Index - China   4.3%   20.1%
Russell Emerging Markets Index - India   4.2%   16.4%
Russell Emerging Markets Index - Russia   3.8%   -36.9%
Russell Emerging Markets Index - United Arab Emirates   3.0%   8.7%
Russell Emerging Markets Index - South Africa   2.5%   9.2%
Russell Emerging Markets Index - Poland   1.7%   -3.1%
Russell Emerging Markets Index - Greece   1.5%   -34.3%
Russell Emerging Markets Index - Taiwan   0.4%   9.3%
Russell Emerging Markets Index - Brazil   -0.1%   -12.0%
Russell Emerging Markets Index - Indonesia   -0.5%   16.4%
Russell Emerging Markets Index - Malaysia   -0.7%   -1.9%
Russell Emerging Markets Index - Mexico   -0.9%   0.6%
Russell Emerging Markets Index - Chile   -3.0%   3.3%
Russell Emerging Markets Index - Colombia   -7.5%   -17.2%

Source: Russell Investments. Total returns, euro denominated.

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. 

Russell Emerging Markets Index country constituents the Czech Republic, Hungary, Morocco and Peru do not meet external reporting requirements (less than 10 total company constituents and/or a company constituent with more than a 30% weight within the country). 

Global equity involves risk associated with investments primarily in equity securities of companies located around the world, including the United States. International securities can involve risks relating to political and economic instability or regulatory conditions. 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.

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.

Russell Investments is the owner of the trademarks, service marks and copyrights related to its respective indexes.

Opinions expressed by Mr. Galindo reflect market performance as of January 14, 2015 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.

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Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of London Stock Exchange Group.