Volatile Times Call for Defensive Measures -- Outperformance in Defensive Investment Strategy Reflected by Russell 3000(R) Defensive Index(TM)
Stability Indexes Capture an Alternative for Volatility-Weary Investors
(firmenpresse) - SEATTLE, WA -- (Marketwire) -- 08/17/11 -- Abigail Huffman, a CFA and director of research at Russell Investments, believes the current performance of the Russell Stability Indexes illustrates the historical benefit of investing defensively in a very challenging economic and market environment.
"In the current yo-yo market, where emotion drives investing amid unprecedented volatility, a more disciplined approach may be beneficial," said Huffman. "While certainly no guarantee of what may happen in the future, our research shows that a defensive investment approach as reflected by the Russell 3000 Defensive Index has delivered higher returns and lower volatility over the past 20 years* and has shown less of an impact than the broad market as reflected by the Russell 3000 Index during falling markets. And, in fact, the defensive approach has performed particularly well in these recent volatile weeks."
In the month of August (through the August 16th U.S. market close), the Russell 3000 Defensive Index has outperformed the Russell 3000 broad market Index with a -5.69% return relative to a -8.13% return for the broad market index. The performance difference between these indices is most pronounced in the highly volatile energy, financial services and consumer discretionary sectors, where the Russell 3000 Defensive Index has outperformance the broad Russell 3000 Index by 2.4%, 4.9% and 2.5%, respectively.
Huffman attributes recent outperformance of the Russell 3000 Defensive Index in today's environment to the types of companies predominately found in the Index, such as those found in traditional defensive market sectors and those that pay high dividends.
The Russell Defensive and Russell Dynamic Indexes are created by splitting the existing Russell U.S. equity indexes in half based upon specific measurements of volatility and quality. These new indexes are designed to represent certain stock characteristics not taken into account by existing style indexes, offering a more nuanced means of tracking investments than traditional growth and value indexes. The new dynamic and defensive components of the entire Russell U.S. family of indexes are a further evolution of investment style, marking the first time stability-oriented quality indicators are examined in combination with stock price volatility.
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:
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Datum: 17.08.2011 - 15:44 Uhr
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