SOURCE: Russell Investments

Russell Investments

April 25, 2013 10:14 ET

Weighted Down by BRICs: Russell Emerging Markets Index Indicates Weak Equity Market Performance in Country Constituents Brazil, Russia, India & China YTD as of 4/23

SEATTLE, WA--(Marketwired - Apr 25, 2013) -  The Russell Emerging Markets Index is down (-1.1%) year-to-date as of April 23rd. One contributing factor may be the performance of its BRIC country constituents Brazil, Russia, India & China, all which have had negative year-to-date returns. And all BRIC country constituents except Brazil underperformed the Index for this same time period. Other negative year-to-date country constituents within the Index as of April 23rd included Korea (-6.4%), Colombia (-6.8%), Egypt (-9.0%), South Africa (-9.4%) and Poland (-10.5%).

On the other side of the spectrum, country constituents the United Arab Emirates (+31.7%), the Philippines (+22.5%) and Thailand (+20.1%) have all enjoyed strong returns year-to-date as of April 23rd relative to the Index.

"The BRIC nations have faced challenges, notably more mixed economic data out of China where the new political regime looks to establish credibility. And Korea's performance thus far this year as shown by the Russell Emerging Markets Index appears to demonstrate the role that political uncertainty and fluctuations in global currencies can play in local market sentiment and investment performance," said Scott Crawshaw, emerging markets portfolio manager for Russell Investments. "And while emerging markets can present additional risks not found in developed markets, it is important to remember the important role these markets can play within a multi-asset portfolio from a diversification and return perspective. When you are seeking exposure to emerging markets, it is important to work with a global asset manager with the insight and capabilities to help you evaluate these opportunities and put them into a broader multi-asset portfolio context."

 
Russell Indexes Performance
 
Index / Index Country 2013 YTD as of April 23rd
Russell Emerging Markets Index -1.1%
United Arab Emirates 31.7%
Philippines 22.5%
Thailand 20.1%
Indonesia 17.5%
Turkey 9.3%
Mexico 7.9%
Malaysia 3.9%
Taiwan 2.5%
Chile 2.2%
Morocco 0.1%
Brazil -0.2%
India -1.4%
China -3.7%
Korea -6.4%
Colombia -6.8%
Egypt -9.0%
South Africa -9.4%
Russia -10.4%
Poland -10.5%
   

Source: Russell Investments. Returns are euro-denominated.

Russell Indexes to Reclassify Greece From Developed to Emerging Market
On March 1st, 2013, Russell Indexes announced that it will reclassify Greece within the Russell Global Indexes from a developed market country to an emerging market country, effective at the conclusion of its annual indexes reconstitution in late June. This conclusion by Russell Indexes resulted from a three-year market risk review process, as prescribed by Russell's methodology, in which Greece did not meet macro- and operational risk criteria for developed market status, but did meet classification criteria for inclusion in emerging markets.

You can find more background on the analysis which led to the reclassification of Greece to an emerging market in a paper entitled Greece: Re-emerged and a video, available on the Russell Indexes website

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.

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. Index returns are presented in euro-denominated terms. 

Russell Emerging Markets Index country constituents Hungary, the Czech Republic and Peru had less than 10 constituents or constituents with more than 30% weight in the index so were not included in the Individual breakdown. 

Opinions expressed by Mr. Crawshaw reflect market performance and observations as of April 23rd, 2013 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

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: http://www.russell.com/indexes/data/daily_total_returns_global.asp

Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than US and longer-established non-US markets.

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.

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