Russell fundamental indices beat market cap benchmarks

April, 2014 Print



Russell Investments said its fundamentally weighted indices in Europe have outperformed their market capitalisation-weighted counterparts in 2013 and the first quarter of 2014.

Russell’s fundamental index series rank companies according to economic factors and fundamental measures of company size, such as adjusted sales, operating cash flow and dividends plus buybacks, rather than stock price. Russell Investments Europe director of index research, Gareth Parker, said: “Should European equity markets improve, our data suggest that in certain cases, investors in smart beta strategies may benefit from factoring in alternative indices, like fundamentally weighted indices, in their pursuit of investment opportunities.”

In the first three months of 2104, four of Russell’s fundamental indices returned between 2.8% and 6.2%, while over 2013, the four indices returned between 22.3% and 26.6%.


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