As investors digest new eurozone GDP data released today, European equity market indices have lost ground relative to other developed global equity markets in the third quarter. After returning 6.8% in the first half of 2014, the Russell Developed Europe Index has lost (-3.7%) in the third quarter as of 12 August.
Russell Developed Europe Index country constituents Portugal (-20.3%), Italy (-7.7%) and Germany (-7.7%) have been among the laggards in the index thus far in the third quarter as of 12 August. All three markets notched positive returns in the first half of 2014. The United Kingdom, while down (-1.2%) in the third quarter as of 12 August, has held up relatively well compared to the parent index (-3.7%).
Russell Investments Europe Investment Strategist Wouter Sturkenboom:
"European equity markets have experienced something akin to a summer of discontent, started by problems in the Portuguese bank Espirito Santo and continuing unrest in the Ukraine. Our European economic growth expectations lowered following the recent sanctions and countersanctions, although not to such an extent as to change our modestly positive outlook on European equities. The Italian equity market has felt the effect of Italy slipping back into recession and German equities have suffered this quarter. The UK equity market, while down slightly this quarter, has been helped by having less exposure to Russia and a national economy that continues to do well."
For more information on the Russell Indexes, go to the Russell Indexes website.
Russell Index Returns
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Russell Index / Index Country Constituent 3Q 2014 First 2014 YTD
a/o Aug. Half a/o Aug.
12 2014 12
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Russell Developed Europe Index -3.7% 6.8% 2.9%
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Russell Developed ex-US Index -1.5% 6.9% 5.3%
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Russell 3000(R) Index 0.8% 7.6% 8.5%
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Russell Emerging Markets Index 4.1% 7.5% 11.9%
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Russell Developed Europe Index - Austria -9.2% 1.6% -7.7%
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Russell Developed Europe Index - Finland -2.5% 7.4% 4.8%
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Russell Developed Europe Index - France -5.8% 6.7% 0.5%
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Russell Developed Europe Index - Germany -7.7% 3.3% -4.7%
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Russell Developed Europe Index - Ireland 1.2% 15.3% 16.7%
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Russell Developed Europe Index - Italy -8.5% 14.6% 4.8%
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Russell Developed Europe Index - Luxembourg -3.7% 1.4% -2.3%
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Russell Developed Europe Index - Netherlands -3.6% 8.8% 4.9%
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Russell Developed Europe Index - Norway -2.2% 11.2% 8.7%
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Russell Developed Europe Index - Portugal -20.3% 10.9% -11.6%
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Russell Developed Europe Index - Spain -5.4% 14.2% 8.0%
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Russell Developed Europe Index - Sweden -2.7% 5.3% 2.5%
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Russell Developed Europe Index - Switzerland -1.9% 8.5% 6.5%
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Russell Developed Europe Index - UK -1.2% 3.8% 2.6%
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Source: Russell Investments. Returns are total returns (reflect reinvestment of dividends and distributions) and are denominated in euros.
