The Russell Emerging Markets Index has returned 3.1% year-to-date as of March 11th. However, within the Index, certain country constituents have significantly outperformed this level of return with United Arab Emirates taking the lead and returning 23.2% YTD.
Country constituents United Arab Emirates (UAE), the Philippines and Thailand have led the index in 2013. UAE has led the index YTD as of March 11th, returning 23.2%, while returning 31.3% for the last year. The Philippines has returned 20.2% YTD as of March 11th, while returning 49.4% for the last year. And Thailand has returned 17.5% YTD as of March 11th, while returning 43.2% for the last year.
Country constituents Egypt, Morocco and Peru have been at the bottom of the index in terms of YTD performance. Egypt has returned (-6.1%) YTD as of March 11th, while returning (-5.4%) for the last year. Morocco has returned (-5.2%) YTD as of March 11th, while returning (-19.0%) for the last year. And Peru has returned (-3.9%) YTD as of March 11th, while returning (-2.4%) for the last year.
“The wide variation of performance within emerging equity markets since the beginning of the year as demonstrated through the Russell Indexes returns helps illustrate the diverse nature of investment opportunities and risks across less mature equity markets,” said Scott Crawshaw, emerging markets portfolio manager for Russell Investments. “Although emerging markets on average have under-performed relative to developed markets in the U.S. and Europe this year, as demonstrated by Russell Emerging Markets Index returns relative to returns of the Russell 1000(R) Index, Russell 2000(R) Index and Russell Developed Europe Index, due in part to various factors such as the potential impact of a weaker Yen on emerging Asian country exports, it is important to remember the important role these markets can play within a multi-asset portfolio from a diversification and return perspective. And when you are seeking exposure to emerging markets, it is important to work with an active manager with the insight to help you evaluate these opportunities and put them into a broader multi-asset context.”
Source: Russell Investments
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 and the Czech Republic had less than 10 constituents and constituents with more than 30% weight in the index so were not included in the Individual breakdown. Russell Emerging Markets Index country constituent Poland has one constituent with more than 30% weight in the index.
Opinions expressed by Mr. Crawshaw reflect market performance and observations as of March 11th, 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.