SOURCE: Russell Investments

Russell Investments

August 14, 2014 11:25 ET

German, Developed Europe Equity Markets Have Lost Ground in the Third Quarter Relative to Other Global Markets in Light of the European Summer of Discontent, According to Russell Indexes

SEATTLE, WA--(Marketwired - Aug 14, 2014) - As investors digest new eurozone GDP data released today, European equity market indices have lost ground relative to other developed global equity markets in the third quarter. After returning 6.8% in the first half of 2014, the Russell Developed Europe Index has lost (-3.7%) in the third quarter as of 12 August.

Russell Developed Europe Index country constituents Portugal (-20.3%), Italy (-7.7%) and Germany (-7.7%) have been among the laggards in the index thus far in the third quarter as of 12 August. All three markets notched positive returns in the first half of 2014. The United Kingdom, while down (-1.2%) in the third quarter as of 12 August, has held up relatively well compared to the parent index (-3.7%).

Russell Investments Europe Investment Strategist Wouter Sturkenboom:

"European equity markets have experienced something akin to a summer of discontent, started by problems in the Portuguese bank Espirito Santo and continuing unrest in the Ukraine. Our European economic growth expectations lowered following the recent sanctions and countersanctions, although not to such an extent as to change our modestly positive outlook on European equities. The Italian equity market has felt the effect of Italy slipping back into recession and German equities have suffered this quarter. The UK equity market, while down slightly this quarter, has been helped by having less exposure to Russia and a national economy that continues to do well."

For more information on the Russell Indexes, go to the Russell Indexes website.

Russell Index Returns

Russell Index / Index Country Constituent   3Q 2014 a/o Aug. 12   First Half
  2014 YTD
 a/o Aug. 12
Russell Developed Europe Index   -3.7%   6.8%   2.9%
Russell Developed ex-US Index   -1.5%   6.9%   5.3%
Russell 3000® Index   0.8%   7.6%   8.5%
Russell Emerging Markets Index   4.1%   7.5%   11.9%
Russell Developed Europe Index - Austria   -9.2%   1.6%   -7.7%
Russell Developed Europe Index - Finland   -2.5%   7.4%   4.8%
Russell Developed Europe Index - France   -5.8%   6.7%   0.5%
Russell Developed Europe Index - Germany   -7.7%   3.3%   -4.7%
Russell Developed Europe Index - Ireland   1.2%   15.3%   16.7%
Russell Developed Europe Index - Italy   -8.5%   14.6%   4.8%
Russell Developed Europe Index - Luxembourg   -3.7%   1.4%   -2.3%
Russell Developed Europe Index - Netherlands   -3.6%   8.8%   4.9%
Russell Developed Europe Index - Norway   -2.2%   11.2%   8.7%
Russell Developed Europe Index - Portugal   -20.3%   10.9%   -11.6%
Russell Developed Europe Index - Spain   -5.4%   14.2%   8.0%
Russell Developed Europe Index - Sweden   -2.7%   5.3%   2.5%
Russell Developed Europe Index - Switzerland   -1.9%   8.5%   6.5%
Russell Developed Europe Index - UK   -1.2%   3.8%   2.6%

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.

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.

Opinions expressed by Mr. Sturkenboom reflect market performance as of August 12, 2014 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

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