SOURCE: Russell Investments

Russell Investments

May 14, 2013 10:10 ET

U.S. Stocks Hit New All-Time Highs as Measured by the Russell Indexes

Led by Defensive Stocks and Sectors, the New U.S. Market Peak of 2013 Is More Cautious and Much Less Dynamic Than the Previous Peaks of 2007 and 2000

SEATTLE, WA--(Marketwired - May 14, 2013) -  The Russell 3000® Index, which represents the entire investable universe of U.S. stocks, reached a new all-time historical price high on April 11th of this year, exceeding the previous all-time high reached on October 9, 2007. The Index continues to march upward, achieving new all-time highs in recent weeks. The previous all-time high for the Index prior to 2007 was reached on March 24, 2000.

The Russell 3000 Index, like other major market indexes, reflects broad historical inflection points for the U.S. equity markets. However, market leading headlines, while interesting, can be deceiving. A high-quality, objective and comprehensive market index can provide additional context and information to investors. The story behind the 2013 U.S. market run and its predecessors is that not all peaks are created equal. The current U.S. rally appears less dynamic and more cautious than the U.S. equity market peaks culminating in 2007 and 2000:

  • 2013 - Defensive Peak. For 2013 year-to-date through April 11, Defensive stocks outperformed Dynamic stocks as measured by the Russell 3000 Defensive & Dynamic Indexes. In addition, sectors traditionally viewed as defensive have led the Index, with the Health Care, Consumer Staples and Utilities sectors the top three. 

  • 2007 - Dynamic Peak. In 2007 through the October 9 then all-time high for the Russell 3000 Index, Dynamic stocks outperformed Defensive stocks as measured by the Russell 3000 Defensive & Dynamic Indexes. Corresponding sector returns show the Energy, Materials & Processing, Technology and Producer Durables sectors as the strongest performers with only one negative performing sector in the Index for this period.

  • 2000 - Dynamic Peak. The late 1990s U.S. market bubble, pierced in 2000, was a dynamic, growth and technology driven market high. For 2000 year-to-date through March 24, Dynamic stocks significantly outperformed Defensive stocks as measured by the Russell 3000 Defensive & Dynamic Indexes. In addition, the Technology sector clearly drove the U.S. equity market, with a 28.5% 2000 year-to-date return as of March 24, with Producer Durables the second strongest returning sector at 7.0% for the same time period.

"The cautious tone on the part of investors is a notable part of our most recent bull market for U.S. equities, and evident when examining Russell Index returns so far this year," said Russell Investments chief market strategist Stephen Wood. "The consistently defensive nature of the 2013 rally is much different than the go-go, tech driven peak of the late 1990s and early 2000's or the dynamic-oriented market top achieved in 2007. The additional market perspective and analytic value of the Russell Indexes allows investors to be more robustly informed and potentially manage exposure to various asset classes, markets and investment styles."

             
Index   1st Jan - 11th
Apr 2013
  1st Jan - 9th
Oct 2007
  1st Jan - 24th
Mar 2000
Russell 3000 Index   12.5%   11.9%   6.8%
Russell 3000 Defensive Index   13.9%   8.8%   -0.7%
Russell 3000 Dynamic Index   11.2%   14.9%   13.7%
Russell 3000 Index Sectors            
Technology   3.8%   20.5%   28.5%
Financial Services   13.8%   -0.3%   3.1%
Utilities   15.9%   12.8%   -0.9%
Health Care   20.0%   10.8%   2.2%
Consumer Discretionary   14.4%   6.6%   -3.0%
Consumer Staples   17.1%   13.1%   -19.9%
Energy   10.3%   28.2%   5.5%
Materials & Processing   5.0%   25.8%   -14.1%
Producer Durables   12.7%   16.8%   7.0%
             

At its annual reconstitution in June, Russell Indexes will help show investors how far the market has come and provide critical information on how it got there. Watch the upcoming Russell Indexes Reconstitution to see what factors have been driving the global markets.

About Russell Investments
Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Russell stands with institutional investors, financial advisors and individuals working with their advisors -- using the firm's core capabilities across capital market insights, manager research, portfolio construction, portfolio implementation and indexes to help each achieve their desired outcomes.

Russell has more than $173 billion in assets under management (as of 3/31/2013) and works with over 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell has $2.6 trillion in assets under advisement (as of 12/31/2012). It has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell traded more than $1.4 trillion in 2012 through its implementation services business. Russell also calculates approximately 700,000 benchmarks daily covering 98% of the investable market globally, which includes more than 80 countries and more than 10,000 securities. Approximately $4.1 trillion in assets are benchmarked to the Russell Indexes.

Headquartered in Seattle, Washington, Russell operates globally, including through its offices in Seattle, New York, London, Paris, Amsterdam, Sydney, Melbourne, Auckland, Singapore, Seoul, Tokyo, Toronto, Chicago, San Diego, Milwaukee and Edinburgh. For more information about how Russell helps to improve financial security for people, visit www.russell.com or follow @Russell_News.

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.

The Russell 3000 Index reached a new historical all-time price level high of 947.16 on April 11th, 2013. Previous all-time historical price level highs for the Index were 907.57 on October 9th, 2007 and 844.78 on March 24th, 2000.

Russell's indexes are unmanaged and cannot be invested in directly.

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