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Small Cap Focus: Large Cap U.S. Stocks Assume Leadership Over Small-Cap Counterparts Year-to-Date as of Feb 4, According to Russell Indexes; Russell Experts See an Opportunity for Active Management

SEATTLE, WA -- (Marketwired) -- 02/06/14 -- After declining less than U.S. large cap stocks in January, the situation has reversed, as U.S. small cap stocks have now declined more than large caps year-to-date as of February 4, as reflected by the Russell Indexes. The Russell 2000® Index returned (-5.2%) year-to-date as of February 4, as compared to a (-4.7%) return for the Russell 1000® Index for the same time period. And within the Russell 2000 Index, dynamic- and growth-oriented stocks have declined less than their defensive- and value-oriented counterparts year-to-date.


Russell Index Returns

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Index                                  January 2014       2014 YTD a/o 2/4
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Russell 2000 Index                         -2.5%               -5.2%
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Russell 2000 Dynamic Index                 -1.3%               -4.3%
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Russell 2000 Defensive Index               -3.7%               -6.1%
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Russell 2000 Growth Index                  -1.4%               -4.4%
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Russell 2000 Value Index                   -3.6%               -6.0%
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Russell 1000 Index                         -2.8%               -4.7%
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Russell 1000 Dynamic Index                 -2.5%               -4.4%
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Russell 1000 Defensive Index               -3.1%               -5.0%
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Russell 1000 Growth Index                  -2.4%               -4.4%
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Russell 1000 Value Index                   -3.2%               -5.1%
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"January was a bit of an anomaly, with small caps outperforming large caps in a downward trending U.S. equity market. Earlier this week, we saw a reverse of this trend and a flight to quality with large caps outperforming small caps and assuming leadership year-to-date," said Jon Eggins, senior portfolio manager with Russell Investments. "Having said that, we continue to see opportunity in small caps in 2014. The recent underperformance in small caps has possibly taken some of the elevated valuations out of the asset class. This suggests the opportunity for active managers to continue to find value in certain U.S. small cap companies."

For more information on small cap equities and to see a copy of Russell Indexes new Small Cap Perspectives quarterly report, go to the Russell Investments website.

The Russell Global Index measures the performance of the global equity market based on all investable equity securities, and is constructed to provide a comprehensive and unbiased barometer for the global segment, The Index includes more than 10,000 securities in 47 countries, and covers 98% of the investable global market. All securities in the Russell Global Index are classified according to size, region, country and sector; as a result the index can be segmented into more than 300 distinct benchmarks.

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.

Small capitalization (small cap) investments involve stocks of companies with smaller levels of market capitalization (generally less than $2 billion) than larger company stocks (large cap). Small cap investments are subject to considerable price fluctuations and are more volatile than large company stocks. Investors should consider the additional risks involved in small cap investments.

Opinions expressed by Mr. Eggins reflect market performance as of February 4, 2014 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

This material is not an offer, solicitation or recommendation to purchase any security.

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. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.

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.

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