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Russell Launches Style Indexes Globally

New benchmarks show value stocks outperforming growth worldwide

Tacoma, WA — April 1, 2008 — Aiming to provide investors with the clearest picture of equities globally, Russell Investments today launched the industry’s most comprehensive set of growth and value equity indexes. Investors now have access to data that shows, for example, that the Russell Global Small Cap Value Index (-6%) has outperformed the Russell Global Small Cap Growth Index (-12.3%) substantially year-to-date in 2008, while five-year annualized returns for these two indexes show a narrowing gap of 24% to 21.8% in favor of global value.

Total returns for about three dozen of Russell’s global indexes with separate tabs for value and growth sub-indexes are available at

The newly launched indexes, including Russell Global Large Cap Growth Index, Russell Latin America Value Index and Russell Australia Growth Index, reflect growth and value segments of the global equity market at different capitalization tiers, for each region and more than 60 individual countries.

“Our comprehensive, multi-factor global style indexes provide investors with greater insight into money manager portfolios and performance patterns,” said Rolf Agather, director of indexes-related business development at Russell Investments.

China, for example, consistent with investment manager behavior, is more heavily weighted in growth managers’ portfolios versus value portfolios and, accordingly, is seen as 81% growth and 19% value by Russell’s index style methodology.

“These reliable, well-tested tools also will help a growing number of global investors better understand and manage their exposure to global markets, particularly through the use of derivatives products, exchange-traded funds and other products,” Agather said.

Since the launch of Russell Global Indexes in early 2007, Russell has extensively researched and considered how best to approach style index construction globally. Russell’s research team tested 16 different characteristics in hundreds of combinations and scenarios, comparing results to actual manager holdings. This exhaustive review, coupled with a deep knowledge of manager behavior, produced no useful reason to re-engineer the existing, widely-used U.S. style methodology.

“We anticipated our review to lead to changes, perhaps the addition of more variables in our style determination,” Agather said. “In the end, we determined that any additional bells or whistles might sound good on the surface but did not add any true benefit for investors.”

As a result of this research, Russell’s global style indexes are constructed with the same multi-factor characteristics as the pioneering U.S. style indexes, which features a combination of book-to-price and I/B/E/S long-term growth estimates. In addition, based on feedback from the industry through an index client advisory board, the existing style weights for the popular U.S. and Japanese components of the Russell Global Index were retained.

At Russell, style is first and foremost a reflection of the differences in how money managers go about their task of selecting which stocks to hold in their portfolios. Certain approaches to equity investment lead to an emphasis on companies that are expected to perform well: delivering above-average growth in sales or earnings, for example. Other approaches place greater emphasis on valuation: how much must be paid for assets and whether—whatever the prospects of the company might be—these prospects are fairly reflected in the stock price.

Currently, the Russell 1000® Growth Index, which reflects the large-cap, growth segment of the U.S. market, is the world’s leading style index based on institutional assets benchmarked to it. Combined with the Russell 1000® Value Index, these two style indexes now track more than $1 trillion in benchmarked assets.

Russell’s innovative index design—including float-adjusted market capitalization, annual reconstitution, multi-factor style analysis, and objective and transparent rules—continues to grow in industry usage and Russell benchmarks now account for 58.5% of institutional U.S. equity products.

About Russell
Russell Investments provides strategic advice, world-class implementation, state-of-the-art performance benchmarks and a range of institutional-quality investment products. Russell has more than $228 billion in assets under management as of Dec. 31, 2007, and serves individual, institutional and advisor clients in more than 40 countries. Russell’s industry-leading indexes have $4.4 trillion in assets benchmarked to them as of Dec. 31, 2007. Founded in 1936, Russell is a subsidiary of The Northwestern Mutual Life Insurance Company.

Steve Claiborne, 253-439-1858

Pierre Perrin-Monlouis
Pierre Perrin-Monlouis
Fondateur de Rente et Patrimoine (cabinet de gestion de patrimoine), Pierre Perrin-Monlouis est un analyste et trader pour compte propre. Il vous fait profiter de son expérience en trading grâce à ses analyses financières et décrypte pour vous les actualités des marchés. Son approche globale des marchés combine à la fois l'analyse technique et l'analyse fondamentale sur l'ensemble des marchés : crypto, forex, actions et matières premières.