SOURCE: Russell Investments

Russell Investments

March 19, 2014 15:47 ET

Russell 2000® Index Has Increased 1.8% Year-to-Date as of March 14, Led by Healthcare Sector, as Russell Indexes Announces 19 First Quarter Pharmaceutical and Biotech-Related IPOs to Be Added to the Index on March 31

SEATTLE, WA--(Marketwired - Mar 19, 2014) - The Russell 2000® Index of small-cap U.S. stocks has returned 1.8% in 2014 as of March 14, with the Healthcare sector within the Index leading the way.

In addition, Russell Indexes announced upcoming first quarter IPO additions for the Index at the close of U.S. markets on Friday. Of 36 IPOs from the first quarter expected to be added to the Russell 2000 Index on March 31, 20 are from the Healthcare sector. And, of these 20 Healthcare sector companies, 19 are in the pharmaceuticals and biotechnology subsector.

"The smaller end of the U.S. market capitalization spectrum has continued to outperform in 2014, building on the 2013 U.S. small cap leadership. And healthcare stocks, particulary those in biotechnology, have been strong contributors this year," said Jon Eggins, small cap equity portfolio manager for Russell Investments. "And while we still see strong potential opportunity in the U.S. small-cap area, it is important for investors to keep an eye on valuations, in particular in some stocks with higher leverage and zero to negative earnings which have been among key drivers of Russell 2000 Index outperformance. U.S. small-cap allocation can be an important part of a global multi-asset portfolio, however stock selection can be critical for investors in 2014 and skilled active managers may continue to find potential opportunities to add value in these less efficient areas of the market." 

"The quarterly IPO addition and annual reconstitution processes help maintain the integrity of Russell Indexes and helps ensure that they provide investors with accurate exposure to rapidly changing global markets," said Russell Indexes investment strategist David Koenig, CFA, FRM. "For users of market indexes, the methodology governing the entrance of new companies into the index is a critical element in the quality of the index and one to be closely watched."

For more information on the Russell 2000 Index and planned first quarter IPO additions, go to the IPO additions section on the Russell Indexes website.

Index / Index Sector   2014 YTD as of March 14
Russell 2000 Index   1.8%
Russell 2000 Index - Healthcare Sector   8.3%
Russell 2000 Index - Consumer Staples Sector   3.2%
Russell 2000 Index - Utilities Sector   3.2%
Russell 2000 Index - Technology Sector   2.6%
Russell 2000 Index - Energy Sector   1.9%
Russell 2000 Index - Financial Services Sector   1.0%
Russell 2000 Index - Producer Durables Sector   0.8%
Russell 2000 Index - Materials & Processing Sector   0.4%
Russell 2000 Index - Consumer Discretionary Sector   -2.9%
Source: Russell Investments. Returns are total returns (reflect reinvestment of dividends and distributions) and are denominated in US dollars.

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. Eggins and Mr. Koenig reflect market performance as of March 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. 

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.

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.