SOURCE: Russell Investments

Russell Investments

October 16, 2014 10:35 ET

U.S. Investors Focused on Quality, Lower Risk & Value in 2014; Russell Combined Style Indexes

SEATTLE, WA--(Marketwired - Oct 16, 2014) - Value- and defensive-oriented stocks have outperformed their growth- and dynamic-oriented counterparts year-to-date and month-to-date as of October 13 across U.S. large- and small-cap stocks as reflected by the Russell 1000® and Russell 2000® Value-Defensive Indexes®.

In 2012, Russell integrated its Stability (Defensive/Dynamic) Index series with its Growth and Value Indexes, introducing the combined style indexes: Growth-Defensive, Value-Defensive, Growth-Dynamic and Value-Dynamic. Stability combines quality and volatility measures, with Defensive representing high quality low risk stocks. The combined style indexes provide investors with a more nuanced picture of how investment styles are performing in the current market environment. It enables investors to see whether growth investors are favoring stocks with Dynamic or Defensive characteristics or, alternatively, whether value investors are favoring stocks with Dynamic or Defensive characteristics. 

"The Russell combined style indexes have clearly been led by value and defensive year-to-date and month-to-date, indicating that investors are gravitating more toward higher quality stocks with reasonable valuations across both large- and small-caps. This is not surprising in a more volatile market environment," said Tom Goodwin, senior indexes research director with Russell Investments. "In more challenging market environments like we have seen in 2014, it is even more important for investors to have access to a robust set of index tools to better understand market dynamics."

2014 Year-to-Date Russell Combined Style Index Performance
Russell Index October MTD as of 10/13/2014   YTD 2014 as of 10/13/2014
U.S. Large Cap Stocks      
Russell 1000® Index -5.2%   2.4%
Russell 1000® Growth-Defensive Index® -4.1%   3.1%
Russell 1000® Value-Defensive Index® -3.5%   5.0%
Russell 1000® Growth-Dynamic Index® -6.9%   0.9%
Russell 1000® Value-Dynamic Index® -6.1%   0.9%
U.S. Small Cap Stocks      
Russell 2000® Index -4.7%   -8.9%
Russell 2000® Growth-Defensive Index® -3.4%   -8.5%
Russell 2000® Growth-Dynamic Index® -8.3%   -10.9%
Russell 2000® Value-Defensive Index® -1.1%   -4.8%
Russell 2000® Value-Dynamic Index® -6.3%   -12.2%

Source: Russell Investments. Returns are total returns (reflect reinvestment of dividends and distributions) and are denominated in U.S. dollars.

For more information on the Russell combined style indexes including a new paper on the subject entitled Russell Stability Indexes®: Performance of Russell 1000® combined style indexes in various market conditions, go to the Russell Indexes website.

The Russell 1000® Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the U.S. market.

The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

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. Goodwin reflect market performance as of October 13, 2014 and are subject to change at any time based on market or other conditions without notice. 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 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.

Copyright © Russell Investments 2014. All rights reserved.

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.