SOURCE: Russell Investments

Russell Investments

February 06, 2014 09:55 ET

European Small Caps Positive Year-to-Date as of Feb 4 as ECB Prepares Policy Decision, According to Russell Investments

SEATTLE, WA--(Marketwired - Feb 6, 2014) -  Small-cap stocks have outperformed their large-cap counterparts in Europe and other developed global markets year-to-date as of February 4, according to the Russell Global Indexes. And according to market experts at Russell, while there may still be room for the European equity market to grow, near-term investor sentiment may hinge in part on upcoming ECB action on interest rates and how it is interpreted by investors.

  • In Europe, the Russell Developed Europe Small Cap Index returned 0.3% year-to-date as of Feb 4, while the Russell Developed Europe Large Cap Index was down (-3.2%) for the same time period.

  • Global developed markets outside the U.S., as reflected by the Russell Developed ex-U.S. Index, were down (-3.8%) year-to-date as of February 4.

  • In the U.S., the Russell 3000® Index was down (-2.9%) year-to-date as of February 4.

"2014 continues as a year of validation in Europe, as the markets seek proof in the eurozone economy that the strong equity market gains of 2013 can be sustained," said Wouter Sturkenboom, investment strategist with Russell Investments Europe. "While valuations have become higher with such strong performance in 2013, we see small caps holding up slightly better in what has thus far been a more volatile 2014 in Europe as well as for the global markets. This small cap outperformance in Europe may be due in part to their relatively small exposure to emerging markets exposure relative to European large cap stocks. European investors are looking for data to validate a market which saw a big run-up in 2013, and will be turning to the upcoming ECB meeting and for a clear signal from Mario Draghi that monetary policy in Europe will remain accomodative."

For more information on the Russell Investments 2014 Annual Global Outlook, go to the Russell Investments Website.

Russell Index Returns

Index 2014 YTD a/o Feb 4
Russell Developed Europe Index -2.9%
Russell Developed Europe Small Cap Index 0.3%
Russell Developed Europe Large Cap Index -3.2%
Russell Developed Europe Defensive Index -3.6%
Russell Developed Europe Dynamic Index -2.1%
Russell Developed ex-U.S. Index -3.8%
Russell 3000 Index -2.9%

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.

Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.

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. 

Small capitalization (small cap) investments involve stocks of companies with smaller levels of market capitalization (generally less than $2 billion) than larger company stocks (large cap). Small cap investments are subject to considerable price fluctuations and are more volatile than large company stocks. Investors should consider the additional risks involved in small cap investments.

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. Sturkenboom reflect market performance as of February 4, 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.