SOURCE: Russell Investments

Russell Investments

January 31, 2014 09:40 ET

Emerging Worries? Look Beyond Headline Volatility to Specific Emerging Market Countries, Says Russell

SEATTLE, WA--(Marketwired - Jan 31, 2014) - Russell Investments

  • Emerging market equities have lost (-5.3%) year-to-date as of January 29, but there is a wide dispersion in performance across countries, as reflected by the Russell Emerging Markets Index.

  • Russell Emerging Markets Index country constituents Colombia (-10.9%) and Turkey (-10.2%) racked up double digit losses year-to-date as of January 29, while Brazil lost (-9.6%) and China (-6.0%) showed losses over the same period.

  • However, four country constituents within the Index have posted positive returns year-to-date; the United Arab Emirates (9.0%), Indonesia (3.1%), Philippines (0.7%) and Morocco (0.4%).

"Recent monetary actions in Turkey, South Africa and India have have contributed to a general rise in emerging market worries. However, it is important for multi-asset investors considering emerging markets to look beyond the recent volatility of the region to try to potentially identify countries which may have better current fundamentals," said Gustavo Galindo, emerging markets portfolio manager with Russell Investments. "The wide variation in country index returns within emerging markets since the beginning of the year illustrates the diverse nature of less mature equity markets and highlights the importance of country selection."

All data is 2014 YTD as of January 29. For more information on emerging market equities and the Russell Indexes, go to the Russell Investments website.

Russell Index Returns:

Index / Index Country Constituent 2014 YTD a/o Jan 29
Russell Emerging Markets Index -5.3%
Russell Emerging Markets Index - Colombia -10.9%
Russell Emerging Markets Index - Turkey -10.2%
Russell Emerging Markets Index - Brazil -9.6%
Russell Emerging Markets Index - Chile -8.9%
Russell Emerging Markets Index - South Africa -6.8%
Russell Emerging Markets Index - Russia -6.5%
Russell Emerging Markets Index - Korea -6.5%
Russell Emerging Markets Index - China -6.0%
Russell Emerging Markets Index - Malaysia -5.2%
Russell Emerging Markets Index - Mexico -5.1%
Russell Emerging Markets Index - India -3.7%
Russell Emerging Markets Index - Poland -2.9%
Russell Emerging Markets Index - Taiwan -2.6%
Russell Emerging Markets Index - Hungary -1.4%
Russell Emerging Markets Index - Thailand -1.3%
Russell Emerging Markets Index - Greece -1.2%
Russell Emerging Markets Index - Morocco 0.4%
Russell Emerging Markets Index - Philippines 0.7%
Russell Emerging Markets Index - Indonesia 3.1%
Russell Emerging Markets Index - United Arab Emirates 9.0%

Source: Russell Investments. Returns are total returns (reflect reinvestment of dividends and distributions) and are denominated in euros.

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.

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, Egypt and Peru did not meet minimum # constituents / diversification reporter requirements, so are not included in the individual country breakdown.

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.

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.

Opinions expressed by Mr. Galindo reflect market performance as of January 29, 2014 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

This material is not an offer, solicitation or recommendation to purchase any security.

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.