Frontier and emerging market equity indices accelerated their market gains in July, drawing further ahead of developed European markets.
The Russell Frontier index gained 5% between July 1 and August 6 while the Russell Emerging Market index rose 3.3%. In contrast, the Russell Developed Europe index fell 3.6% in the period.
Index provider Russell noted that the gains came despite geopolitical disruptions such as the crisis in Ukraine and the Israel-Gaza conflict. More recently, the rise of the Islamic State in Iraq and Syria (ISIS) and atrocities in Kurdistan have hit the headlines and threatened further instability.
However, Russell analysts are so bullish on equities that they would view such turbulence as an opportunity to extend positions, and not cut them.
“We think any pull-back from current market positions will likely offer a buying opportunity, so we think recent world events needn’t shake your focus on your investing goals,” says Andrew Pease, Russell Investments global head of investment strategy.
The Russell Frontier index is up nearly 15% in the year to August 6, while the emerging market index is up more than 11%. The developed Europe index has risen 3% in the same period.
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