Russell Research


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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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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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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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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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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Superannuation regulation and policy update Q3 edition

29/08/2017
Our superannuation consultants provide a synopsis of regulatory and government policy changes impacting the super industry.
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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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