SOURCE: Russell Investments

Russell Investments

January 09, 2015 13:40 ET

(First Week of) January Effect: U.S. Small Cap Stocks Experienced a Choppy Start to 2015 After a Strong Fourth Quarter Relative to U.S. Large Cap Stocks; Investors Keep an Eye on the Small Cap Stock Barometer for Clues About 2015

SEATTLE, WA--(Marketwired - Jan 9, 2015) - The U.S. small cap Russell 2000® Index, after returning 8.1% in the fourth quarter, was down 0.7% after a choppy first five trading days for U.S. small cap stocks. This follows a year in which the Index returned nearly 5%.

And, while past performance is no guarantee of future performance, Russell Indexes analysis shows that positive or negative direction for the Russell 2000® Index in the first five trading has stayed consistent for the Index for the balance of the year in 13 of the last 20 years highlighted in the chart below.

David Koenig -
CFA, FRM, Investment Strategist, Russell Indexes
"In a year of ups and downs in 2014, U.S. small cap stocks as reflected by the Russell 2000® Index finished on a strong note, returning more than 8% in the fourth quarter relative to a 4.5% return for U.S. large cap stocks as reflected by the Russell 1000® Index in the same period. Where the U.S. small cap equity market will go in 2015 is, of course, anyone's guess at this point. However, investors will be watching the Index closely in the coming days and weeks to help gauge the tone for potential performance for the year. In periods of increasing market volatility and unpredictability, investors rely on high quality index tools to help gauge market direction and make more informed investment decisions."

For more information on the Russell 2000® Index, go to the Russell Investments website.

Russell 2000® Index - Historical Performance First Five Trading Days of the Year Full-Year
2014 -0.5% 4.9%
2013 3.0% 38.8%
2012 1.7% 16.4%
2011 0.5% -4.2%
2010 3.1% 26.9%
2009 0.5% 27.7%
2008 -8.0% -33.8%
2007 -1.3% -1.6%
2006 4.9% 18.4%
2005 -5.9% 4.6%
2004 4.1% 18.3%
2003 1.6% 47.3%
2002 1.9% -20.5%
2001 -4.5% 2.5%
2000 -3.2% -3.0%
1999 2.3% 21.3%
1998 -2.6% -2.6%
1997 0.5% 22.4%
1996 -1.2% 16.5%
1995 -0.9% 28.5%

Source: Russell Investments. Total returns, US dollar 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.

The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

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

Opinions expressed by Mr. Koenig reflect market performance as of January 8, 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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