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Large caps beat small caps in 2nd quarter Financial Services sector lags behind all others

TACOMA, Wash. - Large cap stocks slipped past small caps in the second quarter for the first time in five quarters, but the gap between the small cap Russell 2000( Index and the large cap Russell 1000( Index was less than one percentage point.

"Large caps didn't set off any fireworks this quarter, but at long last they fared better than small caps," said Dave Hintz, senior manager research analyst.
Overall, Russell's family of 21 indexes reflected a slightly positive quarter for investors with the broad market Russell 3000( Index inching up 1.3%. The other 20 indexes, which track various market segments, showed relatively little disparity in total performance as the top performing index (Russell Top 200( Growth Index) gained 2.2% while the worst performing index (Russell Small Cap Completeness( Value Index) shed just 0.1%. Coincidentally, these two indexes totally flipped in fortune from the first quarter which saw the small cap value index (6.9%) gain the most among Russell's indexes.

"The second quarter reminds investors that trends within the market can shift without much fanfare," said Hintz. "We saw a shift this quarter from small caps to large caps, and the markets also gave us a change in fortune for the financial services sector."

Regarding the 12 sectors in Russell indexes, the financial services sector dampened the performance of each index, posting a negative return within every capitalization tier and style. In the Russell 3000, for example, financial services lost 2.3%, ending the quarter as the worst-performing sector and one of only three in negative territory. By contrast, in the first quarter, the financial services sector in the small-cap index gained 7.5%, outperforming the other 11 sectors.

Russell employs its indexes to objectively evaluate investment managers for multi-manager funds and other investment services. More than $1.4 trillion in assets are benchmarked to Russell indexes, and more than $364 billion is invested in passive index funds that use them as a model; a 100% increase since 1999.

For further information please contact:
Tyler Bradford - 212-888-6115