SOURCE: Russell Investments

Russell Investments

September 11, 2013 12:02 ET

Global Markets 5 Years After Lehman: Broad-Based and Robust Recovery in Global Equity Markets Led by U.S. Small Caps Since Historic Bankruptcy

SEATTLE, WA--(Marketwired - Sep 11, 2013) - On September 15, 2008 Lehman Brothers Holdings, a global financial services firm and the fourth largest U.S. investment bank at the time, declared bankruptcy.

This historic and closely watched event helped initiate a rapid market decline in subsequent months, with global equity markets reaching all-time lows on March 9, 2009. Since this date, global equity markets have had a measurable and sustained recovery, led by U.S. stocks.

  • The Russell 3000® Index, representing the broad universe of U.S. stocks, lost (-45.9%) between September 15, 2008 and March 9, 2009 then rebounded between March 9, 2009 and September 10, 2013 with a +180.5% return. This return outpaced the Russell Developed Europe Index (+146.6%), Russell Emerging Markets Index (+143.7%) and Russell Asia-Pacific Index (+125.1%) for the same time period.

  • The Russell 2000® Index of small cap U.S. stocks, lost (-51.9%) between September 15, 2008 and March 9, 2009, then gained +219.9% between March 9, 2009 and September 10, 2013 driven primarily by returns in the Consumer Discretionary (+332.5%) and Materials & Processing (+274.8%) sectors.

  • The Russell 1000® Index of large cap U.S. stocks, lost (-45.4%) between September 15, 2008 and March 9, 2009, then gained +177.5% between March 9, 2009 and September 10, 2013, driven primarily by returns in the Consumer Discretionary (+278.5%) and Financial Services (+238.4%) sectors.

"Consistent with Russell's conclusion then that the end of the world was indeed not nigh, market performance since those dark days of 2008 has reinforced the importance to global investors of a strategically disciplined and adaptive multi-asset portfolio approach," said Stephen Wood, Chief Market Strategist at Russell Investments. "While the U.S. stock market performance has led, the equity market rally since March 2009 has been broad-based as well as global -- even areas such as emerging, which have faced challenges in recent months, have logged strong performance since 2009 market lows." 

  Index   Sept 15, 2008 - March 9, 2009   March 9, 2009 - Sept 10, 2013
  Russell 2000 Index   -51.9%   219.9%
  Russell 1000 Index   -45.4%   177.5%
  Russell 3000 Index   -45.9%   180.5%
  Russell Developed Europe Index   -49.4%   146.6%
  Russell Emerging Markets Index   -43.6%   143.7%
  Russell Asia-Pacific Index   -38.6%   125.1%
  Russell 1000 Index Sector        
  Technology   -40.2%   165.4%
  Health Care   -31.3%   162.0%
  Consumer Discretionary   -45.9%   278.5%
  Consumer Staples   -33.2%   141.9%
  Energy   -41.1%   120.5%
  Materials & Processing   -56.0%   192.9%
  Producer Durables   -54.5%   231.2%
  Financial Services   -65.2%   238.4%
  Utilities   -34.9%   104.4%
  Russell 2000 Index Sector        
  Technology   -46.3%   248.9%
  Health Care   -42.3%   204.5%
  Consumer Discretionary   -57.5%   332.5%
  Consumer Staples   -37.1%   175.9%
  Energy   -71.1%   222.3%
  Materials & Processing   -59.3%   274.8%
  Producer Durables   -56.1%   218.1%
  Financial Services   -53.2%   175.8%
  Utilities   -36.2%   114.3%

Source: Russell Investments.

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. 

Past performance does not guarantee future performance. This material is not an offer, solicitation or recommendation to purchase any security. Returns cited are US dollar-denominated.

Opinions expressed by Mr. Wood reflect market performance and observations as of September 10, 2013 and are subject to change at any time based on market or other conditions without notice. 

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.