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Emerging equity markets generated positive returns despite energy drag, says Russell Indexes


The Russell Emerging Markets Index gained 2.6% year-to-date as of 14 January 2015. This followed a 4.4% increase for the Index in the second half of 2014.

The impact of falling oil prices impacted sector performance. Within the Index, the Energy (+0.7%) and Materials & Processing (+1.9%) sectors were at the bottom of the pack in 2015 year-to-date. This followed losses of (-20.2%) and (-5.6%), respectively, in the second half of 2014.
Oil exporter Russia which was the worst performing country in the index for the second half of 2014 with a (-36.9%) loss, has rebounded this year, generating 3.8% as of 14 January 2015. This year Turkey has been the strongest performer returning 7.4%.
Gustavo Galindo – Senior Emerging Markets Portfolio Manager, Russell Investments – says: “Emerging markets comprise a diverse set of markets and economies. No longer can investors take a broad brush approach when investing in emerging markets, as the returns we saw in the second half of 2014 and so far in 2015 show that we are seeing a divergence in performance at a country and sector level.
“While falling oil prices have certainly had an impact on the region, the impact is not all bad. In the case of certain oil importing markets such as India, China and Turkey, the impact has actually been good. We continue to see value in certain, but not all, emerging markets, reinforcing the importance of a fundamental, bottom-up approach.” 

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