SOURCE: Russell Investments

Russell Investments

April 17, 2014 13:03 ET

Growth Drag: Growth-Oriented Stocks and Sectors Help Weigh Down Major U.S. Indexes in the First Half of April (as of 4/14), With Larger Impact Felt in U.S. Small Caps, According to Russell Indexes

SEATTLE, WA--(Marketwired - Apr 17, 2014) - Growth-oriented stocks and sectors have contributed to the U.S. market downturn in the month of April as of April 14.

The U.S. large-cap Russell 1000® Index is down (-2.4%) in April as of April 14, with the Russell 1000® Growth Index (-2.8%) down more than the Russell 1000® Value Index (-2.0%) for the same time period. This growth/value split is more pronounced in smaller capitalization stocks in April. The U.S. small cap Russell 2000® Index is down (-4.9%) in April as of April 14, with the Russell 2000® Growth Index (-6.1%) down significantly more than the Russell 2000® Value Index (-3.6%).

In the month of April-to-date, traditional growth-oriented sectors have contributed to the downturn in U.S. large cap stocks. The Healthcare (-4.5%), Consumer Discretionary (-3.1%) and Technology (-2.7%) sectors have dragged down the Russell 1000® Index in April-to-date, while the Utilities (0.9%), Energy (0.7%) and Consumer Staples (-0.1%) sectors have fared better. In the Russell 1000® Index, the value-oriented Financial Services sector (-3.8%) was also a large detractor from April-to-date performance.

The same trend applies to U.S. small cap stocks. The Healthcare (-9.5%), Technology (-7.2%) and Consumer Discretionary (-4.8%) sectors have weighed down the Russell 2000® Index in April-to-date. The Energy (-0.4%), Consumer Staples (-1.7%) and Utilities (-2.0%) sectors are also down for the month, but much less pronounced.

"Growth and value leadership in the market tends to move in cycles over time and, in the case of 2014-to-date, may quickly shift from one to the other," said David Koenig, CFA, FRM, index investment strategist for Russell Investments. "By using index tools to dig below the surface of broad market performance into shifting style and sector leadership, investors can gain greater insight into potential factors driving the market. Observing the growth / value dynamic through index performance can help underscore the potential benefits of style diversification in a multi-asset portfolio."

For more information on the Russell growth and value indexes including a new research study by Koenig entitled "Value? Growth? Or Both," go to the Russell Indexes website.

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. 

Opinions expressed by Mr. Koenig reflect market performance as of April 14, 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.

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