Russell Adds Style To Emerging Markets
Russell Investments has launched new indexes to reflect the style classifications of mega-cap stocks in emerging markets. The Russell Emerging Markets Mega Cap Growth Index and Russell Emerging Markets Mega Cap Value Index bolster Russell’s existing suite of Emerging Markets indexes by capturing the risk and return profile of mega cap securities in emerging markets.
“Offering the most robust tools to measure investment style has been a hallmark of Russell Indexes for more than 20 years”
“Offering the most robust tools to measure investment style has been a hallmark of Russell Indexes for more than 20 years,” said Ron Bundy, CEO for Russell Indexes at Russell Investments. “By incorporating style classifications for emerging market securities, we provide yet another important differentiator of stock and equity market performance in order to help investors more fully capture market realities within emerging markets globally.”
Bundy added that Russell’s style indexes are used widely in asset allocation and performance measurement as well as market measures, already accounting for more than $1 trillion in benchmark assets, and as the basis for investable products.
Russell’s examination of style differentiation in emerging markets shows that these stocks have exhibited performance and potential portfolio diversification benefits similar to Russell’s U.S. and Developed value and growth indexes. For example, there are clear value and growth cycles similar to the value and growth cycles seen in U.S. and developed markets. In addition, there are periods when the market capitalization of emerging markets have been allocated more to value than to growth, countering the common perception that emerging markets are solely growth markets and thus style characteristics are not as distinguished as in developed markets.
This research is summarized in a paper that shows growth and value performance is divergent in emerging markets as it is in developed markets; there has been a cyclical pattern to style returns in emerging markets, similar to what we have observed in developed markets; and emerging market style indexes have displayed attractive diversification and performance characteristics. The full report is available upon request.
Russell also announced today that the firm has entered into a licensing agreement with Global X Funds to create exchange-traded funds (ETFs) benchmarked to Russell’s Emerging Markets style indexes. ETFs in registration include the Global X Russell Emerging Markets Growth ETF and the Global X Russell Emerging Markets Value ETF.
“We are very pleased to be working with Russell due to their capabilities and leadership in the development of style indices,” said Bruno del Ama, CEO, Global X Funds.
For returns data on the new Russell Emerging Markets Indexes, please go to: www.russell.com/Indexes/data/fact_sheets/global/russell_Emerging_Markets_mega_cap_value_index.asp.
About Russell Investments
Founded in 1936, Russell Investments is a global financial services firm that serves institutional investors, financial advisers and individuals in more than 40 countries. Over the course of its history, Russell’s innovations have come to define many of the practices that are standard in the investment world today, and have earned the company a reputation for excellence and leadership. The firm has $155.4 billion in assets under management, as of December 31, 2010. To see how Russell helps to improve financial security for people, visit www.russell.com.
Russell launched its family of indexes in 1984 to more accurately measure U.S. market segments and better track investment manager behavior for its investment management and consulting businesses. The innovative index design includes float-adjusted market capitalization, annual reconstitution, multifactor style analysis as well as objective and transparent rules. Russell Indexes account for more than $3.9 trillion in benchmarked assets, as of December 31, 2009.
About Global X Funds
Global X Funds is a New York-based provider of exchange-traded funds that facilitates access to investment opportunities across the global markets. As one of the fastest growing ETF providers in the world, it recently exceeded $1 billion in managed assets across the largest suite of China-sector and Brazil-focused funds, as well as Global Commodities fund suites. For more information, please visit www.globalXfunds.com.
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.
Russell Investments is the owner of the trademarks, service marks and copyrights related to its indexes.
Russell’s indexes are unmanaged and cannot be invested in directly.
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.
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