SOURCE: Russell Investments

Russell Investments

March 20, 2015 10:05 ET

Year-to-Date Euro Currency Drop Has Led to YTD Performance Pop for Euro-Based FTSE Developed Index

As Euro Hits Twelve Year Low Relative to the U.S. Dollar, Hedged Indices Illustrate Importance of Currency to Global Investors

SEATTLE, WA--(Marketwired - Mar 20, 2015) - With the euro recently hitting a twelve year low relative to the U.S. dollar,* global investors are more aware than ever of the impact a rising U.S. dollar can have on global indices. And, while the declining euro reflects the cloud over the Eurozone markets and economy in 2015, Eurozone investors investing in global markets may see a silver lining.

The FTSE Developed Index (euro-based, unhedged) has returned 17% year-to-date as of 16 March relative to a 5.1% return for the same euro-based index hedged to the euro for the same time period.

Gareth Parker
Director, Index Research Design & Development, Russell Indices
"The strengthening U.S. dollar has increased awareness of the currency impact on index performance, an impact often reduced via currency hedging. Year-to-date hedged and un-hedged performance for the FTSE Developed Index shows the potential benefit of currency exposure and also the potential short-term drawback of utilizing currency hedging to try to avoid currency risk. But as no one can predict with certainty the future moves of global currency rates, market participants should consider the right approach for their own circumstances."

The FTSE Global Equity Index Series (GEIS) covers around 7,400 securities in 47 different countries -- covering every equity and sector relevant to international investors' needs. Indices within the FTSE Global Equity Index Series are designed for the creation of a broad range of financial products, such as index tracking funds, derivatives and Exchange Traded Funds (ETFs), as well as being performance benchmarks. FTSE indices are used extensively world-wide for benchmarking portfolios, performance measurement, investment analysis, asset allocation, index tracking funds and structured products. Index Ground Rules for the FTSE Global Equity Index Series are publicly available and are approved by the FTSE Governance Board. External FTSE Advisory Committees are consulted on changes to those Ground Rules before final approval is given by the FTSE Governance Board.

FTSE and Russell Indices are wholly owned by London Stock Exchange Group. For more information on the FTSE Developed Index, go to the FTSE website.

*The euro reached $1.0513 versus the U.S. dollar in late European trading on Wednesday, March 11, a level last seen in January 2003.

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.

Publication of indexes or index constituents in no way suggests or implies a representation or opinion by Russell or FTSE International Limited ("FTSE") 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 or FTSE and neither Russell nor FTSE makes any representation, warranty or guarantee with respect to the performance of any security included in a FTSE Index.

Opinions expressed by Mr. Parker reflect market performance as of March 16, 2015 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

Global equity involves risk associated with investments primarily in equity securities of companies located around the world, including the United States. International securities can involve risks relating to political and economic instability or regulatory conditions. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which have less stability than those of more developed countries.

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