SOURCE: Russell Investments

Russell Investments

July 30, 2012 11:52 ET

Russell Indexes: BRICs Grow on the Global Stage, as Market Participants and as Olympic Hosts

SEATTLE, WA--(Marketwire - Jul 30, 2012) - The Olympic Committee and the global investment community appear to be on the same page in regards to the growth and importance of the BRIC nations. Three BRIC countries, China, which hosted the Summer Olympics in 2008, Russia (Winter 2014) and Brazil (Summer 2016) represent a growing part of the global investment opportunity set. While all three of these economies are markedly different and at diverse stages of economic development, their selection as Olympic hosts reinforces their rising significance on the global economic stage.

"The selection of Russia and Brazil as future Olympic host countries confirms their increasing political, economic and cultural significance and is an opportunity for these countries to showcase themselves -- but this visibility alone does not appear to be sufficient rationale for investment," explains Stephen Wood, Russell Investments' Chief Market Strategist. "China did host the 2008 games; but China, while an emerging market, is also the world's second largest economy and plays a proportionately prominent role in the global economy."

The weighting of the BRIC countries within the Russell Global Index has grown 5.26% since the index's introduction in 1996, with China one of the major drivers of this growth. At the most recent rebalance of the Russell Global Indexes on June 25, 2012 China remains the world's third largest country in terms of total market capitalization behind the U.S. and Japan. 

Recent Russell Investments' research noted that the BRICs currently display attractive fundamentals but emerging markets as a whole also pose short-term investment challenges due to the more volatile nature of their economies and markets. Maintaining a long-term outlook with these markets is important.

"The BRIC nations and other emerging markets may represent investment opportunities, but also higher risk, which reinforces the importance of diversifying across asset classes and global markets," continues Wood. "While the Olympics may help raise a nation's visibility, investors would be wise to focus on fundamental factors and plan a global, multi-asset investment strategy."

The Russell Global Index includes more than 10,000 securities in 48 countries and covers 98% of the investable global market. All securities in the index are classified according to size, region, country and sector. Daily Returns for the main components are available here:

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.

Returns provided are US dollar-denominated.

Opinions expressed by Dr. Wood reflect market performance and observations as of July 30, 2012 and are subject to change at anytime based on market or other conditions without notice. Please remember that 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 Olympics" is a registered trademark of the International Olympics Committee.

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.

1 The modular structure of the Russell Global Index provides developed and emerging markets regional index options. Russell uses a combination of macroeconomic and investment market criteria to distinguish developed from emerging markets. Additionally, Russell uses a transparent methodology for recognizing countries that have become developed, or that, conversely have taken steps to be less accessible to investors. Further explanation is available in the "Russell Global Indexes Construction and Methodology," posted here: