Russell Investments Insights

Helping Advisors Blog


Happy Holidays: Fed wraps up 2017 with another rate hike

13/12/2017
The U.S. Federal Reserve (the Fed) delivered another rate hike today, raising its target policy rate by 25 basis points to a new range of 1.25-1.50%.
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The eurozone: Mid-cycle renaissance

4/12/2017
The eurozone is in the middle of a mid-cycle renaissance, both economically and politically. Reflation combined with the refutation of populist movements in the region have laid the foundation for a self-sustaining recovery that could last for years to come. This environment should provide a strong tailwind to eurozone financial markets, which we continue to favor.
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Executive Summary

4/12/2017
Markets have turned optimistic, but it’s late in the cycle and central banks are becoming hawkish. The challenge ahead is to safely navigate between euphoria and danger.
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United States: Too much of a good thing?

4/12/2017
Global growth has lifted the U.S. economy and multinational earnings to their strongest position in years. But with an eight-year-old U.S. expansion, imbalances gradually building, and expensive market valuations, we believe some caution is warranted for U.S. equities. We forecast lackluster U.S. equity market returns in 2018 and view end-of-cycle risks as becoming elevated thereafter.
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Asia Pacific: Low rates, solid growth

4/12/2017
2017 was a strong year for the Asia-Pacific region, underpinned by solid global growth and Chinese demand. We expect the region’s economy to post another year of high growth in 2018, with good support from Australia and Japan, though with developing economies outpacing developed.
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Currencies: Don’t be tempted by yield

4/12/2017
Despite offering higher interest rates than most of their developed-market counterparts, the U.S. dollar (USD) and the New Zealand dollar (NZD) were the two worst performers among Group of Ten (G10) currencies in 2017. We would not bet on a reversal of that trend. The story is different with emerging markets (EM) currencies, which are still appealing despite a tentative recovery this year.
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Russell monthly update

4/12/2017
Here is a summary of investment markets for the month of November 2017
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Turning the tide

29/11/2017
All the major central banks with the exception of the Bank of Japan will reduce their unconventional monetary measures (quantitative easing) in 2018. What impact will the withdrawal of QE have on fixed income markets?
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How much runway is left for the U.S. expansion?

29/11/2017
The U.S. expansion is over eight years old, and the S&P 500® Index is up almost 300 percent, cumulatively, from the bottom in 2009.1 This is the second longest bull market in modern history and the third longest economic expansion in records dating back to the 1800s. History would suggest that now is not the time to be complacent. After all, recessions almost always bring bear markets. And so, after such a strong and long run, it’s important for investors to take a step back and think about where we are in the cycle.
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Is a recession on the horizon?

22/11/2017
Andrew Pease, Global Head of Investment Strategy, recently presented his three potential market scenarios in our UK Annual Investment Summit this month. Here’s a summary.
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Russell monthly update

17/11/2017
Here is a summary of investment markets for the month of October 2017
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The Case for Owning Quality Stocks Now

13/11/2017
Russell Investments believes that a premium for high quality stocks exists, in that they will outperform low quality stocks over the long term. We believe that this anomaly exists as investors tend be focussed on more volatile stocks in the short term with higher upside potential, leading to high quality stocks being mispriced. Furthermore, high quality companies tend to outperform in periods of market stress and downturns, which can have material impact on long term performance.
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U.S. stocks in second longest rally since 1936: where to from here?

8/11/2017
With U.S. stocks seemingly setting new all-time highs every few days, it can be easy to overlook the fact that just nine years ago, markets the world over were roiled by intense market volatility. This memory prompted us to evaluate the status of the current bull market from a historical perspective: How does this rally compare to past U.S. expansions?
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It’s late in the market cycle. Do you know where your portfolio is?

8/11/2017
Note: This is the first blog in a three-part series: Know what you own; Know where you want to go; Know how to get there.
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Bank of England rate hike: One and done

3/11/2017
The Bank of England (BoE) has bitten the bullet and hiked the base rate from 0.25% to 0.5%, but in a dovish turn also provided forward guidance that outlines a very gradual path for future hikes. This was a close call with compelling arguments in favour and against. We are in the against camp and looking ahead we expect the BoE will have to stand down. A one and done rate hike against such a dovish forward guidance background will only briefly impact markets, pushing down gilt yields and the pound and supporting equities.
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Multi-asset review Q3 2017

26/10/2017
Andrew Sneddon, Managing Director – Multi-Asset Solutions, discusses Russell Investments' performance in the September quarter and the outlook for the remainder of 2017.
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Quarterly Fixed Income Survey: September 2017

23/10/2017
On the basis of this quarter’s results, it is clear that the dichotomy between what the credit market expects versus what the interest rate market expects, continues. We recommend that investors clip the coupon in credit, but maintain some dry powder for more opportunities ahead.
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Umbrellas for a rainy day: Why options can be better than cash to manage downside risks

23/10/2017
Markets are now in the 9th year of the global bull run since the global financial crisis troughs in March 2009. As equity markets continue rising to increasingly extreme valuations, more and more investors are employing downside protection strategies to manage the risk of loss. This article explains why Russell Investments believes options and other derivatives should be used as part of a broad palette of portfolio management tools, in addition to cash and physicals, to deal with different market conditions.
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28% of financial advisers surveyed are considering real return funds

18/10/2017
More than a quarter of the 200 financial advisers we surveyed are considering more sophisticated options, in particular real return funds when reviewing clients’ portfolios, given the current market environment.
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A fresh look at the Australian Equity market after reporting season

18/10/2017
As Australian investors look for high-income alternatives to term deposits, many are considering exchange traded funds (ETFs). ETFs trade like an equity investment, offering investors access to a diversified, liquid and transparent high-yield investment at lower cost than actively managed funds. But not all ETFs are created equal. For the last five years, the Russell Investments’ High Dividend Australian Shares ETF (ASX code: RDV) has outperformed its closest rivals. Portfolio Manager, James Harwood, explains why.
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Atypical market conditions (such as today’s) shine a spotlight on risk measurement

18/10/2017
People who really understand investment risk understand that numbers are only part of the story. And when market conditions are atypical – as they are today – it’s important to be extra careful in interpreting risk reports.
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Marcus Muetze

Russell quarterly update

17/10/2017
Here’s a summary of investment markets for the three months ending 30 September 2017
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North Korea tensions a key watchpoint for markets

17/10/2017
As tensions continue to rise between North Korea and US, we share current watchpoints and market implications for the Asia-pacific region
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Alexander Cousley

Momentum Investing: Buying Winners and Selling Losers

11/10/2017
Russell Investments believes that high momentum stocks will generate higher returns than low momentum stocks over a market cycle. To capture this momentum premium, Russell Investments’ equity funds are typically exposed to an allocation of high momentum stocks through a market cycle. But momentum portfolios can be subject to “momentum crashes”. Russell Investments therefore dynamically manage allocations to these high momentum stocks looking at three broad indicators - cycle, valuation and sentiment.
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Missing the Forest for the Trees: Why Valuation Matters

11/10/2017
You can’t see the forest for the trees: It’s a saying as old as time. The thinking goes that you’re so focused on a few things in front of you that you can’t take a step back and see the bigger picture.

In 2017, the trees are U.S. equities—and make no mistake, they’re giant ones, standing tall front and center. The forest is a significant portion of your portfolio.

Yes, U.S. stocks are high. And their related indexes are, in some cases, higher than they’ve ever been. The problem? They’re obscuring investors from peering deeper in—from seeing beyond a short-term time horizon into what else could thrive in their portfolios. Blame it on sentiment and cycle.
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Momentum vs Asymmetry: Why downside management strategies are even more important now

6/10/2017
This article explores the implications of Russell Investments' latest strategist outlook for investors and their portfolios.
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Standing at the crossroads: An investor's choice of response after market turmoil

4/10/2017
This article shows the dramatic impact of an investor's choice of response during market turmoil on their future wealth balance.
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Markets bounceback after shocks

4/10/2017
History suggests that periods of sharp declines have often been followed by periods of some of the most favourable returns. Figure 1 shows the strong returns of U.S. markets during the 12 – 24 month periods following some of the sharpest declines of the past 40+ years. Even after the severe market falls (including the Oil Shock in the 1970s, stock market crash in 1987, ‘Tech Bubble’ in the early 2000s and the global financial crisis) where stocks lost up to half of their value over a short period of time, markets have bounced back to new highs after each shock.
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Harvard Goes Multi-Asset

3/10/2017
If you’ve followed the news, you’ve seen that over the last few months, my alma mater, Harvard University, has gone through several changes at their endowment—the largest academic endowment in the world. After years of middling returns and a well below peer return of (gasp!) 8% last year, Harvard has brought in a new CEO of the Harvard Management Company. His first change: to move from a portfolio of asset class sleeves to a generalist investment model in which all members of the investment team take ownership of the entire portfolio. We see this approach clearly as multi-asset.
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United States: Secondhand growth

28/09/2017
Cyclical strength in Europe and the emerging markets has rippled back into the U.S. market, helping large-cap businesses beat earnings expectations for two consecutive quarters. However, domestic fundamentals still look mediocre.
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Executive Summary

28/09/2017
The monetary policy tide is heading out, putting upward pressure on government bond yields. Momentum can drive equity markets higher, but we believe extremely stretched U.S. equity valuation makes the market vulnerable to any unwelcome news.
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Currencies: Euro rally pauses but has legs

28/09/2017
Everyone seems to love the euro, so much so that it may have become a crowded trade. In the near term, too much optimism could dampen the rally. However, the likely tapering of bond purchases by the European Central Bank in 2018 and the revival of centrist governments will support the euro in the medium term.
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Asia-Pacific: Riding the wave of momentum?

28/09/2017
The developed Asia-Pacific economies have been firming, while the developing economies continue to ride the wave of positive momentum. China’s 19th National Congress (due to begin in late October) will be the focus for the region, while geopolitical risks with North Korea will likely remain. Valuations remain slightly expensive, although we note that Japan is looking more attractive than the rest of the region.
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The eurozone: The euro versus everything else

28/09/2017
From the perspective of financial markets, the third quarter of 2017 is best described as "the euro versus everything else." Tailwinds in the form of continued strong economic growth, favourable politics and robust earnings were neutralised by a single headwind: a rising euro exchange rate. Looking ahead, we expect the balance between these two forces to tilt back in favour of the fundamentals, supporting eurozone assets.
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Russell monthly update

17/09/2017
Here is a summary of investment markets for the month of August 2017
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Investors facing volatile markets need skill, scale and discipline

13/09/2017
It’s hard to correctly time the exit at the top and the re-entry at the bottom of the market. Oftentimes, reversals are quick and unpredictable and the market has picked up steam again by the time nervous investors feel confident that everything has settled and it’s an appropriate time to re-enter.
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Keep calm in volatile markets: The cycle of market emotions

7/09/2017
When things are great, we feel that nothing can stop us. And when things go bad, we look to take drastic action. Because emotions can be such a threat to an investor's financial health, it is important to be aware of them. This awareness can then protect you from the negative consequences of impulsive and irrational reactions to them.
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Why downside protection may matter more than upside growth

7/09/2017
The global macroeconomics and geopolitical outlook remains uncertain, suggesting that an environment of low rate, low growth, and high valuations may linger.
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The search for returns: the low-return imperative

7/09/2017

We believe the search for returns for the remainder of 2017 and beyond is not going to get any easier against a backdrop of high U.S. equity prices, narrow credit spreads and low bond yields.

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Multi-Asset review Q2 2017

10/08/2017
Andrew Sneddon, Managing Director – Multi-Asset Solutions, discusses Russell Investments’ performance in the June quarter and the outlook for the remainder of 2017.
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Russell Investments monthly update

10/08/2017
Here is a summary of investment markets for the month of July 2017
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Russell Investments annual update

19/07/2017
Here's a summary of investment markets for the financial year ending 30 June 2017.
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Russell Investments quarterly update

6/07/2017
Here’s a summary of investment markets for the three months ending 30 June 2017.
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Where did the stock market volatility go?

6/07/2017
The first six months of 2017 saw remarkable tranquility in the stock market: annualised volatility of 7.5%1 being well below half of the market’s long-term average.
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The Trump agenda update: Does it still matter to investors?

29/06/2017
President Trump and the Republicans in Congress have set out to achieve a very aggressive legislative agenda in their first 200 days. These policy initiatives pose an intricate web of positive and negative threads for global investors to grapple with. We’ve written extensively about how difficult it is to get things done in Washington DC. And the Trump Administration has not been immune to these challenges.
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Quantitative modeling insights: repeat performance

28/06/2017
Our modeling inputs appear stuck in neutral for 2017, offering no reason to change our outlook on equities or recession risk.
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United States: Strike three on inflation?

28/06/2017
The U.S. economy still looks resilient but mediocre. Incoming data during the second quarter proved consistent with our below-consensus growth forecast for 2017. The bigger surprise has come from the sharp slowdown in core inflation. We think this should put a halt to further Fed funds rate hikes this year. The lack of pricing power also poses a medium-term threat to corporate profitability.
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Asia-Pacific: tortoise and the hare?

28/06/2017
The developing Asia-Pacific economies are powering ahead like the speedy hare in the classic fable, although we are less optimistic on the outlook for some of the more developed regional countries that plod along like the fable’s tortoise. Resilient global trade continues to be a tailwind, and AsiaPacific equities currently appear slightly expensive after a strong secondquarter performance.
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Currencies: European renaissance

28/06/2017
The political risks to the eurozone project are fading after elections in France, Austria and the Netherlands put centrists into power. A pro-euro, pro-globalization reform agenda could make the single European currency more appealing in the longer term.
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The eurozone: Markets are closing the gap

28/06/2017
In the past quarter, eurozone markets started to close the gap between strong fundamentals and weak relative performance. A "good news" show coming from the economy, political developments, earnings growth and monetary policy pushed markets higher. Although this rally has stretched near-term sentiment, we expect the eurozone to continue to do well in the medium term.
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Executive Summary

28/06/2017
We still want to buy dips and sell rallies against the backdrop of an expensive U.S. equity market, a broadly neutral earnings outlook, and sentiment indicators that point to complacency. Europe and, to a lesser extent, Japan and emerging markets (EM) have better cycle support. Government bonds are expensive, but a lack of global inflation pressure should keep yields in a range.
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Global Market Outlook - Q3 update: Late-cycle lean out

28/06/2017
Our Investment Strategist team deliver the outlook for the third quarter. We're in a late-cycle, momentum-driven market, where valuation is at an extreme. Momentum can drive markets beyond fundamentals for an extended period. No investment process is going to pick the peak in the cycle, but we'd lean out as risks increase
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China’s excessive debt: a bit of breathing room?

18/06/2017
Brian Ingram, President, Russell Investments China, explains the steps being taken by the Central Government to manage the deleveraging of China’s unsustainable debt levels.
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US Fed hikes rates into mediocrity

15/06/2017
Senior Investment Strategist Paul Eitelman digs deeper on the latest US Federal Reserve rate hikes.
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Russell Investments monthly update

3/06/2017
Here is a summary of investment markets for the month of May 2017
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Has the US market overshot? Bet against mean reversion at your peril

26/05/2017
We’ve all heard and readily accept the investment axiom, buy low and sell high. But have you ever thought about the market forces that makes this true? Robert Shiller has. He won a Nobel Prize for this thinking.
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Global Fixed Income Survey Results: Spotlight on Local EMD, Rates and Credit Spreads

19/05/2017
Russell Investments' quarterly survey of 165 third party fund managers puts the spotlight on local emerging market debt, rates and credit spreads.
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Adam Smears
David Jurca

2017 Federal Budget Update

10/05/2017
The summary provides commentary on the macro-economic view of the federal budget announcements and highlights key changes for investors, particularly in superannuation.
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Q1 2017 - Russell Investments' dynamic approach delivers a successful quarter (Retail)

9/05/2017
Andrew Sneddon, Managing Director – Multi-Asset Solutions, discusses Russell Investments' performance in the March quarter and the outlook for 2017.
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Macron wins French Presidential election

7/05/2017
Russell Investments’ Senior Investment Strategist, Wouter Sturkenboom reviews the 2017 French presidential election results and other political events that may impact eurozone markets.
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Monthly update

5/05/2017
Here is a summary of investment markets for the month of April 2017
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Brexit heats up: 4 things to watch

26/04/2017
Russell Investments’ Senior Investment Strategist, Wouter Sturkenboom reviews the Brexit drivers for the upcoming June 8 snap election as well as four key things for investors to watch as the mechanics of the UK leaving the EU get underway.
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French presidential election: Macron and Le Pen run-off May 7

25/04/2017
Russell Investments’ Senior Investment Strategist, Wouter Sturkenboom reviews the initial French presidential election results and gives his views on what to expect from eurozone markets in the days ahead.
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Quarterly update

21/04/2017
Here’s a summary of investment markets for the three months ending 31 March 2017
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Recession: Is it still unlikely in the U.S?

19/04/2017
Senior Quantitative Investment Strategy Analyst Kara Ng reviews key economic indicators in the U.S. and if a potential recession in the economy is still unlikely.
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Investment Strategy: The right mix of active AND passive?

17/04/2017
CIO Jeff Hussey believes that an investment strategy is more likely to help investors achieve their intended outcome when determining what the right mix of active AND passive might be depending on an investor’s risk profile.
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Global markets forecast: Is the rally based on fake news?

30/03/2017
Global markets forecast for this quarter evaluates how the latest pause on U.S. markets growth and other factors are impacting Europe, Japan and emerging markets.
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Executive Summary

29/03/2017
Equities have rallied on better global growth and expectations for theTrump administration’s economic stimulus in the U.S. market. We worry that expectations are running ahead of reality.
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Currencies: U.S. dollar has limited upside

29/03/2017
Interest rates still give the U.S. dollar (USD) an advantage over other developed-market currencies, but the 25% appreciation predicted as a result of the so-called border tax is not in the cards.
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Asia-Pacific: power without glory

29/03/2017
Economies in the Asia-Pacific region are motoring on, with our expectation for full-year 2017 real GDP growth at just under 5%. That’s just a slight acceleration on 2016, as trade continues to improve and as business conditions firm. In our view, Asia-Pacific equity markets are fairly priced, while interest rates are facing upward pressures as global reflation returns.
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The eurozone: Reflation is winning

29/03/2017
Eurozone economic growth has been strong and its financial markets have started to rebound. In the broader context of continued monetary stimulus, we think it is becoming ever more certain that reflation is winning. When markets see the same, we expect the rebound will accelerate and the gap with strong fundamentals will close.
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United States: Newton’s cradle in motion

29/03/2017
Market psychology has swung dramatically over the last 12 months. In early 2016, investors were worried about the risks of secular stagnation and a U.S. recession, but the narrative has veered in recent months toward the awakening of animal spirits. We continue to argue that the truth falls in the middle of these two extremes — that the U.S. economy is resilient but mediocre. This view has underpinned our "buy the dips and sell the rallies" investment strategy. As the market pendulum swings closer to euphoria, a more cautious strategy seems warranted.
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Quantitative modelling insights: holding pattern

27/03/2017
Our model for U.S. equities versus U.S. fixed income, continues to show a neutral preference as of March 15, 2017, without much change since our annual outlook report.
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Active & Passive Investing

16/03/2017
Why we believe the smart money takes a total-portfolio approach.
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How fragile are today’s financial markets?

16/03/2017
The U.S. stock market continues to hit new highs. Interest rates remain remarkably low compared to historical norms. It’s almost 8 years since the last U.S. economic recession. But nothing lasts forever.
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When should we care about geopolitical risk?

13/03/2017
Between Trump, Brexit, and the coming French elections, there’s been a great deal of focus on geopolitical risks and their possible impacts on markets and investors. So how do we deal with geopolitical risk? We believe the answer lies in taking a close look at Cycle, Value and Sentiment.
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Trump vs Emerging Markets

4/03/2017
The initial slump of Emerging Markets assets following Donald Trump’s election appears to be waning.
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Russell monthly update

2/03/2017
Here is a summary of investment markets for the month of February 2017
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Two key themes emerged over the quarter in Q4 2016 (Retail)

14/02/2017
We believe 2017 will provide some real opportunities for active management compared to the prior 12-18 months.
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Russell monthly update

7/02/2017
Here is a summary of investment markets for the month of January 2017
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The new investor

2/02/2017
Forget ACTIVE versus PASSIVE. We should all be proactive fixed income investors.
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How low will returns be in 2017?

2/02/2017
Russell Investments CIO Jeff Hussey looks at the year ahead and what he believes will be the driving investment theme: the search for returns and the low-return imperative.
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Equity volatility continues to test new lows

30/01/2017
Last Friday (January 27th, 2017) the CBOE VIX index finished the day at 10.58, with an intra-day low of 10.30. While the index opened this week with a sizable jump, even casual observers of market volatility will recognise this figure as remarkably low. A closer look at where this result stacks up relative to history provides some interesting perspective.
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Russell quarterly update

9/01/2017
Here’s a summary of investment markets for the three months ending 31 December 2016.
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2/01/2017
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‘7-point plan for staying patient: You need more than one string to your bow when seeking returns’

13/12/2016
Just like the archers of days gone by, a modern diversified investment portfolio needs multiple strings.
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7-point plan for staying patient: Beware the deadly combination of big bets and market noise

12/12/2016
Short term trends can look like mere blips in a longer timeframe. The patient investor understands the dangers in responding en masse to sharp, but strategically insignificant, market movements.
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Executive summary: investment tourism

8/12/2016
Brexit and U.S. President-elect Donald Trump make a complicated late-cycle outlook even less predictable. Investors will need to navigate stretched valuations in 2017 and a potentially more aggressive U.S. Federal Reserve (Fed) as they work out the policy direction of the new U.S. administration.
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Quantitative modeling insights: holding pattern

7/12/2016
Our model for U.S. equities versus U.S. fixed income, which had slightly favored equities through much of 2016, shows a neutral preference as of November 25, 2016.
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Currencies: will Trumponomics echo Reaganomics?

7/12/2016
The U.S. dollar has surged since the unexpected victory of Donald Trump in November’s U.S. presidential elections. If the greenback’s ascent continues apace, it could rival the overshoot of the dollar during Ronald Reagan’s first term as president in the 1980s. However, we don’t think such an overshoot is a likely scenario.
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Asia-Pacific: steady growth

7/12/2016
The Asia-Pacific region continues to both deliver and promise steady economic growth. For 2016 as a whole we see real GDP growth overall at around 4.75%, down only fractionally on the previous year. We expect a similar steady rate of growth in 2017. Against this constructive backdrop, the long downtrend in inflation and in official interest rates is coming to an end across much of the region, and we believe Asia-Pacific equity markets continue to offer moderately good value.
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The eurozone: trust in fundamentals

7/12/2016
It is hard to stick to an investment process when financial markets seem to ignore everything it is built on. However, it is precisely in times like these that we have to remind ourselves that an investment process aims to not only identify investment opportunities, but also prevent investors from making behavioral mistakes. We believe giving up on the favorable fundamentals in the eurozone would be such a mistake. And we continue to trust they will lift eurozone financial markets.
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United States: a brave new world

7/12/2016
Trumponomics7 will likely boost growth at a time when the U.S. economy is already operating at close to full capacity. This should nudge inflation higher and give the Fed more wiggle room to hike the federal funds rate. Cyclically, we see the presidential election outcome as a wash for the equity market but bad for bonds.
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Global Market Outlook 2017: The new abnormal

7/12/2016
Political uncertainty dominates the 2017 outlook as markets adjust to the new realities of President-elect Trump and Brexit.
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Russell Investments' dynamic approach delivers a successful quarter in Q3 2016 (Retail)

28/11/2016
Volatility looks set to continue over the remainder of this year and into next as investors grapple with the transition of power in the US, a likely Fed rate hike in December and the longer-term impact of Brexit.
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Are we there yet? The search for global inflation

29/10/2016
As many a parent setting off on a long road trip with children has heard all too often, there is the familiar question of “Are we there yet?” Most commonly this question is initially asked just as the family car “pulls out of the garage” and is re asked every 15-30 minutes. So what does a family road trip have to do with bond markets?
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Russell Investments’ 2016 Global Market Outlook–Q4 Update

4/10/2016
Global markets appear vulnerable to fourth-quarter shocks
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Will the U.S. presidential election impact markets?

30/09/2016
The U.S. presidential election has been very topical with relentless coverage over the last few months. But it’s worth taking a step back to evaluate the real impact of the U.S. presidential race on investments, and how that impact compares to other factors.
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‘7-point plan for staying patient’: Trust your strategic plan but keep some powder dry!

27/09/2016
Oliver Cromwell, in the opening battle of the English civil war in 1642, is reported to have told his Roundhead troops, “Put your trust in God, my boys, but keep your powder dry.” *Or in today’s common application, “Keep calm and take precautions so you can ‘let rip’ when the opportunity presents itself.”
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No great surprise – Fed rate remains steady

21/09/2016
Today’s announcement of no Fed rate hike wasn’t much of a surprise to our investment strategists. Paul Eitelman delves into what this latest news might mean for global markets.
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American politics: Markets still depend on fundamentals

20/09/2016
How might 2016 American politics impact the U.S. economy and markets? Markets still depend on fundamentals.
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Russell Investments’ dynamic approach delivers a successful quarter in Q2 2016 (Retail)

14/09/2016
The June 2016 quarter was another eventful period and we remain in a low return, high volatility world.
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Russell monthly update

7/09/2016
Here is a summary of investment markets for the month of August 2016
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‘7-point plan for staying patient’: Stick to the plan… your discipline and patience WILL be tested

6/09/2016
There is nothing like a volatile market environment to test the discipline and patience of an investor. As the adviser, your clients are looking to you to provide the experienced hand to help them sail through market squalls and storms.
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Finding opportunity in volatile times

24/08/2016
Volatility is expected to continue throughout the remainder of 2016. Helping clients to focus their attention on the factors they can control can be both useful and rewarding.
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Hybrids – more to conversion risk than actual bankruptcy

9/08/2016
Overall everything is looking pretty positive for investors in bank hybrids with the potential for higher returns with little in the way of apparent risk.
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‘7-point plan’ for staying patient: Diversify … but do it intelligently

8/08/2016
Some of the world’s safest investments have now become (thanks to their extreme valuations) some of the riskiest. What does that do to a portfolio that is half bonds and half the ‘conventional’ risky asset – equities? Should such a portfolio still be considered diversified?
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Russell monthly update

8/08/2016
Here is a summary of investment markets for the month of July 2016
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‘7-point plan’ for staying patient: Get real … you MUST make the mental adjustment’

27/07/2016
News of late - be it in the political or economic arena - has been rather downbeat. Politics aside, economic growth outlook in both developed and emerging economies is uninspiring.
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Russell quarterly update

26/07/2016
Here’s a summary of investment markets for the three months ending 30 June 2016.
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‘7-point plan’ for staying patient: Understand the ‘lay of the board’

25/07/2016
Over the past few weeks, the global community has been coming to terms with the fact that an unlikely event, namely victory for the Leave camp in the UK, did actually take place. Media outlets around the world made the most of the story. Financial markets reacted decisively on the day – dumping the pound, retreating from European shares, especially the vulnerable banking sector, and elevating sovereign bonds, and the Yen, to new highs. Brexit was another episode of volatility, and with the wide-ranging consequences it could have for Europe and beyond, we think volatility is here to stay. It is hard to imagine the global economy churning through the mounting challenges and surprising us on the upside any time soon. We stand by our view that good investment returns will be hard to come by, at least in the near term.
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Where to for bonds?

20/07/2016
In October last year we watched with anticipation as bond markets reacted to concerns over  sluggish Chinese growth prospects and Europe’s ability to stave off deflation in light of falling growth rates.
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Q3 2016 Global Market Outlook update

5/07/2016
Our investment process at mid-year 2016 sees expensive U.S. equities, weakening business cycle fundamentals in developed markets and growing signs of exhaustion in the second quarter rally.
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Spotlight on: Russell Investments’ equity ETFs

27/06/2016
At the end of May 2016, Russell Investments’ Portfolio Managers, James Harwood and Robert Moore, held a briefing on the recent ETF reconstitution. Each of the ETFs underwent some changes to ensure they maintain the correct positioning to achieve their end desired outcomes.

Below is an overview of the EQUITY component of the briefing.
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7 things successful investors do in volatile times

27/06/2016
If you and your clients are feeling a little bombarded by news about US and Australian elections, ‘Brexit’ fallout, global growth, government debt, record low interest rates (negative in some parts of the globe), high valuations, declining earnings, Chinese data releases, commodity price weakness, see-sawing currencies – and wondering what to make of it all, I have some news for you. Take comfort… you are not alone!

In fact, investors everywhere are grappling with the same big question:
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We have a Brexit vote. So what happens next?

24/06/2016
Earlier today, the results of the UK referendum on European Union membership were announced: the UK will leave the EU. This historic moment brings to an end the referendum process, but heralds a new chapter of uncertainty for the UK and the EU.
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Spotlight on: Russell Investments’ bond ETFs

21/06/2016
At the end of May 2016, Russell Investments’ Portfolio Managers, James Harwood and Robert Moore, held a briefing on the recent ETF reconstitution. Each of the ETFs underwent some changes to ensure they maintain the correct positioning to achieve their end desired outcomes.

Below is an overview of the BOND component of the briefing.
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Russell monthly update

20/06/2016
Here is a summary of investment markets for the month of May 2016
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Market Update - Fed rate decision

16/06/2016
Steady as it goes. For now

In the end there really wasn’t much suspense. U.S. Federal Reserve chair Janet Yellen had made it pretty clear in a speech she gave on 6 June that the Fed intended to keep interest rates steady at its June Open Market Committee (FOMC) meeting. And that’s exactly what happened. So for now, the U.S. federal funds rate remains unchanged at between 25 to 50 basis points.
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Multi-asset Investing: Many clients ask these 5 questions

2/06/2016
We’re seeing strong growth in multi-asset strategies. And we’re not alone. As Casey-Quirk notes in their November 2015 report, the industry is expecting to see more than $3 trillion of demand for multi-asset strategies worldwide between now and 2020.
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A quarter of two halves Q1 2016 (Retail)

26/05/2016
The March 2016 quarter was one of the most eventful and volatile first quarters for share markets in a long time. Yet, by the end of the quarter, the market had recovered.
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Executive Summary

24/05/2016
The 2016 Russell Investments/ASX Long-term Investing Report underscores the danger of Australian investors relying on local asset classes, and traditional ‘do-it- yourself’ approaches, to achieve their long-term investment goals.
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It’s a matter of style: Understanding growth and value investing

10/05/2016
Any time there is market sell off like we saw in the first quarter of 2016, you might hear value investors getting really excited. Like trends, investment styles come in and out of favour—and when market prices are lower, value investors are eager to ‘buy low’ and capitalise on quality stocks at relatively cheap prices. But what do the terms ‘value’ or ‘growth’ really mean?
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Russell Investments Strategists Philosophy and Process

30/04/2016
This summary explains why Russell Investments believe an investment process is important and the philosophy that underpins the process. It creates structure around decision making and focuses discussion on the areas where value can be added.
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Russell quarterly update - 31 March 2016

27/04/2016
Here’s a summary of investment markets for the three months ending 31 March 2016.
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How well do you know the Fed?

23/03/2016
The US Federal Reserve (Fed) is an important decision-making group for guiding America’s monetary policies—which often impact Australian investors and the global economy. But how well do you and your clients know the Fed?
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Q2 2016 Global Market Outlook update

23/03/2016
Paul Eitelman, US Investment Strategist, discusses the top three considerations in the Q2 2016 market update: corporate earnings, global manufacturing data and heightened risks in emerging markets.
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Market volatility, divergent central banks and falling commodities (Retail)

25/02/2016
Market volatility, divergent central banks and falling commodities (Retail)
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3 tips for handling bumpy financial markets

18/02/2016
Investing in 2016 might feel a bit disarming after strong Australian and global share returns from 2009-2014. Our experts continue to expect ‘lower returns and higher volatility’, but provide 3 tips for investors to handle bumpy financial markets and stay focused on long-term goals
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Don't let market sentiment derail your portfolio from achieving your goals

17/02/2016
Global equity and credit markets have been very volatile since the beginning of the year. We believe markets have over-reacted and should rebound when sentiment improves. In the meantime, focus on your end goals and ensure your portfolio is well diversified and dynamically managed as market conditions evolve.
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Rattled by the markets? Consider spreading your bets.

16/02/2016
If you or your clients are feeling rattled by the markets so far this year – consider yourself normal. When the markets get messy, generally it’s because investors have lost confidence in their ability to clearly see the future. What can you do to help ensure your clients don’t get caught up in the sentiment trades?
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Russell monthly update

15/02/2016
Russell monthly update
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China’s paradigm shift: Why I’m (still) cautiously bullish about 2016

11/02/2016
Brian Ingram, President of Russell Investment Advisors, Shanghai, shares his views on the structural transformations that will shape China and its economy in the year ahead.
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Market volatility continues

18/01/2016
The global market drop on Friday, 15 January 2016 looks to be an extension of the stock market weakness we have seen since 2016 began. We believe, at its core, this weakness is a reprise of the weakness we saw last August and we expect much the same result.
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Quantitative Modeling: Moderation in all things

12/01/2016
Our models-based outlook continues to signal neutral on equity versus fixed income. Following the U.S. stock market rally in October of 2015, the signal moved toward equity, but not enough to indicate a bull market.
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Fed lift-off begins – a little

17/12/2015

At long last, lift-off! Coming as no real surprise, the Federal Open Market Committee (FOMC) has just announced it will hike interest rates by 25 basis points. It's a move anticipated by our team for months, and comes after the committee declined to raise rates in September due to market turbulence in August and concerns about China's economy since mid-year.

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Keeping afloat – Part 1: Three keys for bond investing when interest rates rise

16/12/2015
Advisers and investors have been asking: how do I invest in bonds when key global interest rates are set to rise from historically low levels? Whilst the question has been around for a while, the US Federal Reserve’s expected interest rate hikes—after nearly a decade of no increases—have made the question timely. In this article, I’ll outline three keys for bond investors aiming to stay afloat.
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Keeping afloat – Part 2: Practical tools for investing when interest rates rise

16/12/2015
What are some practical ways to invest in bonds when key global interest rates are set to rise from historically low levels? In Part 1 of this blog series, I explained why investing in shorter duration, higher quality credit makes sense, given the US Federal Reserve’s expected series of interest rate hikes. This follow-up post will address how investors can do that effectively using Russell Investments’ exchange-traded funds (ETFs).
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Quantitative easing: Draghi and the ECB opt for moderate approach

4/12/2015
So the divergence of central banks continues. On Dec. 3 the European Central Bank (ECB) took the widely anticipated step of providing more stimulus to the European economy. It's the first move in a December pas de deux that we expect will include a hike in U.S. interest rates after the Dec. 15-16 meeting of the U.S. Federal Reserve's (the Fed) Federal Open Market Committee.
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Lessons from the market

16/11/2015
Every market cycle – bull or bear – provides opportunities for investors to improve their process for investing. The best thing to do is learn from past events and apply those lessons to your future investment strategies and circumstances. Here are the top five lessons we took away from recent market trends.
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Prepared for the arrival of a lower return, higher volatility world - Q3 2015 (Retail)

9/11/2015
Prepared for the arrival of a lower return, higher volatility world - Q3 2015 (Retail)
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Global economic forecast: An inflection point, not a turning point

29/09/2015
Investors have had a lot to digest in recent months: The U.S. Federal Reserve's "will they?/won’t they?" dance with raising interest rates (they didn’t, as my colleague noted last week); wild stock gyrations in China; and tumult in U.S. equities. But what’s the big picture? Our soon-to-be released Global Market Outlook – 4th Quarter Update looks past recent headlines to offer some analysis for the coming months.
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22/09/2015
My Dad turned 70 recently, and is well and truly settled into his retirement. I asked him to name one thing he savours most about his departure from the rat race. Simply put: "Traffic—no peak hour traffic." Then he added wistfully, "If I could make a dollar for every car stuck in peak traffic…" I said, "Well, you kind of do…"
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Fed keeps interest rates near zero a little longer

18/09/2015
At the closely watched September meeting of the U.S. Federal Open Market Committee, Chair Janet Yellen and the Committee kept interest rates on hold today. Russell Investments' strategists delve into what this record run of near-zero U.S. official interest rates means for Australian investors.
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Riding market rollercoasters with discipline and dollar-cost-averaging

17/09/2015
In the last few weeks, global financial markets have given investors a rollercoaster ride. It’s likely those already invested benefited from the very strong returns since the GFC. Consequently, some volatility probably hasn’t caused them too much concern. What about clients who are just starting to look at investing in the markets?
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Exploring the world’s investment frontiers

4/09/2015
Exploring the world’s investment frontiers
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Update - Global market volatility

26/08/2015
The past few weeks have seen increased volatility and sell-offs across global risk markets. This is a complex and evolving situation that increasingly impacted the global economy, where growing concerns over the economic slowdown in China have put downward pressure on multiple markets, particularly equity and commodity markets. What are Russell Investments’ strategists expecting?
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Greece votes 'No'; a 'Grexit' now appears more likely

8/07/2015
On Sunday, 5 July, Greece voted 'No' to a recent (but expired) bailout offer from the Eurozone. This has sparked increased ambiguity for the path of Greece within Europe. Uncertainty is high and rising as we enter the next phase of the Greek crisis. Inevitably, the 'No' vote increases the likelihood for Greece to exit the Eurozone ('Grexit'), but it is by no means guaranteed. It all hinges on the negotiation position of the Greek government, the attitudes of creditors and the European Central Bank’s patience.
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Russell quarterly update

30/06/2015
Here's a summary of investment markets for the three months ending 30 June 2015.
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22/06/2015
The world offers no shortage of competent investment managers. Many handle funds prudently, make pretty good decisions and deliver reasonable returns. But then there are a few who often outperform their industry peers or a particular market benchmark, or both year after year. They seem to have a special quality – an ‘X’ factor, but how might one find such an investment manager?
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Is bank bias worth the risk?

18/06/2015
The Russell Investments/ASX Long-term Investing Report 2015 encouraged investors to stop relying on purely local investments - and consider the full range of asset classes available to them. Given the ‘Big 4’ banks make up nearly 30% of the Australian share index, many investors are highly exposed to the sector. In this article, Graham Harman examines the issues, considers best and worst case scenarios and suggests some risk mitigation strategies.
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Russell Investments/ASX Long-term Investing Report 2015

3/06/2015
This is the only widely available report that provides Australian investors with a comprehensive and factual comparison between the long-term returns of Australian residential investment property and key domestic and global asset classes – such as shares, fixed-interest investments and diversified managed funds.
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Market volatility leaves little room for romance

25/05/2015
Tim Noonan, Managing Director of Capital Market Insights for Russell Investments’ US retail team, shares his perspectives on market volatility and a segment at the 2015 Academy Awards.
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Where to seek shelter in a global currency storm?

10/03/2015
The currency market can often feel like a brewing storm. For Australian investors with overseas holdings, currency fluctuations are a significant source of concern, and potentially, rewards. In this article, Scott Fletcher outlines why and how investors can manage currency risks in their investment portfolios.
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Russell monthly update

27/02/2015
Here is a summary of investment markets for the month of February 2015.
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Quantitative easing: Is Europe taking a note out of the US playbook?

28/01/2015
On 23 January, the European Central Bank (ECB) announced plans to launch a larger than expected 'US style' quantitative easing (QE) program designed to help stimulate eurozone growth and raise medium-term inflation expectations. As of this writing, that announcement has been met with positive reactions in global share and bond markets.
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Evolution of Investing: Refining the investment process to serve the needs of today's investor

14/01/2015
Overview of Russell's investment evolution with James Barber and Erik Ristuben.
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Cheap oil: More fuel than foul for the economic engine

14/01/2015
Since mid-2014, watching the price of Brent crude oil has been like watching a falling rock. From USD $115 a barrel in June 2014, to $80, then $60, then to under $50 as of January 16, 2015, it has been a dramatic plunge. For the most part, this is very good news for the global economy. But there are a few caveats – a swing this sharp and rapid can be unsettling, to say the least.
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Russell Investments' 2015 Annual Global Outlook

1/01/2015
Investors face divergent central bank policies and differential growth rates across the globe through 2015, all but guaranteeing the need for another year of living actively.
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Financial System Inquiry

8/12/2014
On 7 December 2014, the Government released the final report of the Financial System Inquiry.
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Russell equity ETFs index reconstitution

26/11/2014
On Tuesday 7 October 2014, Portfolio Manager of Russell's equity ETFs, James Harwood, together with Russell Portfolio Analyst, Andrew Zenonos, held a briefing on the index reconstitution of the Russell High Dividend Australian Shares ETF (RDV) and the Russell Australian Value ETF (RVL) .
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Financial System Inquiry - Interim

15/07/2014
On 15 July 2014, David Murray AO presented the interim report for the Financial System Inquiry (FSI). Mr Murray chairs the Committee charged by the Treasurer to examine how the national financial system could be positioned to best meet Australia’s evolving needs and support economic growth.
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Investor sentiment: Looking inside the market's mood swings

16/06/2014
Let's face it, 2014 is playing out about as nicely as we could expect, so far. The U.S. economy is gradually improving as evidenced by improved employment, increasing lending by banks, and the May 22nd, 2014 Markit U.S. Manufacturing PMI survey. Even global tensions in the Ukraine and South China Sea don't seem to have rattled investors. Still, I have noticed an underlying note of caution among investors who otherwise seem content to ride along with the current market trend.
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Emerging Markets: Will Ukraine fallout become contagious?

1/03/2014
I often find myself writing about strategic investment issues we are managing on behalf of our clients or discussing big-picture market views from the 10,000-foot level. Today I'm planting both feet firmly on the ground to address a more troubling and granular issue – our immediate views on the unsettled and fluid conflict in Ukraine and, more specifically, its ramifications for markets and investors.
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2014 Annual Global Outlook

1/01/2014
2014 Annual Global Outlook
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Global Market Outlook: 10 themes for the Year of the Horse

1/12/2013
Global Market Outlook: 10 themes for the Year of the Horse
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Full Report: ASX / Russell Long-term Investing Report 2013

1/07/2013
Full Report: ASX / Russell Long-term Investing Report 2013
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Investing in volatile times

30/01/2012
Andrew Sneddon, Russell Investments, Portfolio Manager, discusses how Russell responded to developments in Europe during the December quarter.
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Enter the Draghi

14/11/2011
Only the ECB and its new president, Mario Draghi, can prevent a deeper crisis from engulfing Europe. To do this, the ECB has to commit to buying a virtually unlimited amount of Italian government bonds – effectively a form of 'quantitative easing'. The promise to buy Italian bonds must be largely unconditional. Markets need to believe that there is a buyer of last resort for Italian debt.
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Europe Update - 2 November

2/11/2011
Going into last week's European summit, market expectations for substantive moves by politicians and policy makers were actually quite high. In the last 18 months, every time the market had expectations like these, policy makers had responded with the bare minimum to "kick the can down the road." This time, arguably when more was on the line than ever, they actually delivered a response that met the relatively high expectations.
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