Defensive Small Cap European Indexes Have Fared Well Amid Global Equity Market Volatility; FTSE Russell
SEATTLE, WA--(Marketwired - Jan 15, 2016) - While the global equity markets began 2016 on a distinctly negative note, particularly for small cap stocks, further analysis by global index leader FTSE Russell indicates that European small cap stocks, particularly defensive-oriented European small cap stocks, have fared better than dynamic-oriented European small cap stocks and European large cap stocks over time.
The Russell Stability Indexes, otherwise known as the Russell Defensive and Dynamic Indexes, help investors separate companies from the standpoint of quality and volatility. The Russell Defensive Index is designed to include stocks demonstrating a combination of higher quality and lower volatility characteristics over time. The Russell Dynamic Index, on the other hand, includes stocks exhibiting a combination of lower quality and higher volatility characteristics over time.
In 2016 year-to-date as of January 8, as measured by the Russell Stability Indexes, defensive-oriented small cap stocks in Europe have fallen less than their dynamic-oriented counterparts and less than defensive- and dynamic-oriented European large cap stocks. Examining the same set of stocks through the Russell Stability Indexes over a longer period reveals similar trends, with defensive-oriented European small cap stocks taking the lead relative their dynamic-oriented counterparts and relative to defensive- and dynamic-oriented European stocks for the one, three, five and ten year periods ended 8 January 2016.
Catherine Yoshimoto, Index Research Analyst, FTSE Russell:
"The additional level of analysis possible through our defensive and dynamic global indexes helps investors go beyond cap tiers to get a better sense for how different types of companies may perform over different market cycles. In this case, adding a defensive and dynamic lens to a cap tier lens across global equity markets provides a more nuanced view for investors which may help inform their strategy for navigating market volatility across and through a variety of markets.
More research and insights from Catherine Yoshimoto and other FTSE Russell index experts can be found on the new FTSE Russell blog .
About FTSE Russell:
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 80 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $10 trillion is currently benchmarked to the FTSE Russell indexes. For more than 30 years, leading asset owners, asset managers, ETF providers and investment banks have used FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance, and embraces the IOSCO principles. FTSE Russell is also focused on index innovation and client collaboration as it seeks to enhance the breadth, depth and reach of its offering.
FTSE Russell is wholly owned by London Stock Exchange Group. For more information, visit www.ftserussell.com .
© 2016 London Stock Exchange Group companies.
London Stock Exchange Group companies includes FTSE International Limited ("FTSE"), Frank Russell Company ("Russell"), MTS Next Limited ("MTS"), and FTSE TMX Global Debt Capital Markets Inc ("FTSE TMX"). All rights reserved.
Views expressed by Catherine Yoshimoto are as of January 13, 2016, and are subject to change.
"FTSE®", "Russell®", "MTS®", "FTSE TMX®" and "FTSE Russell" and other service marks and trademarks related to the FTSE or Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX and Russell under licence.
All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by the London Stock Exchange Group companies nor its licensors for any errors or for any loss from use of this publication.
Neither the London Stock Exchange Group companies nor any of their licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the Indexes for any particular purpose to which they might be put.
The London Stock Exchange Group companies do not provide investment advice and nothing in this communication should be taken as constituting financial or investment advice. The London Stock Exchange Group companies make no representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the London Stock Exchange Group companies. Distribution of the London Stock Exchange Group companies' index values and the use of their indexes to create financial products require a licence with FTSE, FTSE TMX, MTS and/or Russell and/or its licensors.
Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown reflect back-tested performance. All performance presented prior to the index inception date of September 29, 2011 is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back- tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index.
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