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Russell Investments Questions Strength of UK Economic Recovery Despite Strong Recent Relative UK Equity Market Index Performance Relative to Other Developed Europe Countries as of July 8

SEATTLE, WA -- (Marketwired) -- 07/11/14 -- UK equities performed well in the second quarter 2014 and in July-to-date according to the Russell Global Indexes, although Russell Investments is cautious of the sustainability of the UK economic recovery.

The United Kingdom country constituent within the Russell Developed Europe Index returned 0.5% in July as of July 8, making it and Norway the two strongest performing developed Europe constituent markets this month, and leading the parent index which has lost (-0.5%). This performance follows a strong second quarter when the UK constituent returned +4.3%, outpacing the 3.9% return of the Russell Developed Europe Index.

Despite its recent strong performance versus its developed market peers in Europe, Russell believes the recovery that is driving this positive performance is potentially not as sustainable as recent economic data suggests.

Russell Investments Europe investment strategist Wouter Sturkenboom commented:

"Despite a certain level of optimism in recent months with respect to the strength of the UK economy, reflected in UK equity market performance as reflected by Russell Developed Europe Index country constituent returns, we believe investors should not get ahead of themselves in their expectations for UK growth going forward. Recent UK GDP growth has been driven by less substantial measures such as consumer spending out of savings and rising housing prices and is still trying to transition to fundamental factors such as spending out of wage growth and business investment."

Later this month, Sturkenboom and the team of global strategists at Russell will issue their latest quarterly outlook update, elaborating on Russell's market view for the remainder of 2014. For more information on the Russell Indexes, go to the Russell Indexes website.

Russell Index Returns

----------------------------------------------------------------------------
Russell Index/Index   July Month-to-  2nd Quarter  1st Quarter  2014 YTD as
Country Constituent  Date as of July     2014         2014       of July 8,
                         8, 2014                                    2014
----------------------------------------------------------------------------
Russell Developed         -0.5%          3.9%         2.9%          6.3%
Europe Index
----------------------------------------------------------------------------
United Kingdom             0.5%          4.3%         -0.5%         4.4%
----------------------------------------------------------------------------
Norway                     0.5%          8.2%         2.7%         11.8%
----------------------------------------------------------------------------
Ireland                    0.4%          9.0%         5.8%         15.8%
----------------------------------------------------------------------------
Switzerland                0.2%          3.3%         5.0%          8.8%
----------------------------------------------------------------------------
Luxembourg                -0.4%          1.9%         -0.4%         1.0%
----------------------------------------------------------------------------
Netherlands               -0.7%          6.4%         2.3%          8.0%
----------------------------------------------------------------------------
Finland                   -0.7%          6.0%         3.5%          6.7%
----------------------------------------------------------------------------
Germany                   -0.7%          3.0%         0.3%          2.5%
----------------------------------------------------------------------------
Sweden                    -1.1%          0.9%         4.4%          4.2%
----------------------------------------------------------------------------
France                    -1.7%          3.1%         3.5%          4.9%
----------------------------------------------------------------------------
Spain                     -1.7%          7.9%         5.8%         12.2%
----------------------------------------------------------------------------
Italy                     -2.5%          -1.1%        15.8%        11.7%
----------------------------------------------------------------------------
Portugal                  -4.0%          -4.7%        16.4%         6.5%
----------------------------------------------------------------------------
Austria                   -4.7%          1.0%         0.7%         -3.1%
----------------------------------------------------------------------------

Source: Russell Investments. Returns are total returns (reflect reinvestment of dividends and distributions) and are denominated in euros.

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.

Global equity involves risk associated with investments primarily in equity securities of companies located around the world, including the United States. International securities can involve risks relating to political and economic instability or regulatory conditions. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries.

Russell Developed Europe Index country constituents Belgium and Denmark had an insufficient number of company constituents to meet external performance reporting requirements.

Opinions expressed by Mr. Sturkenboom reflect market performance as of July 8, 2014 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

Forecasting is inherently uncertain and may be incorrect. It is not representative of a projection of the stock market, or of any specific investments

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.

Copyright © Russell Investments 2014. All rights reserved.

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