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Russell’s Annual Index Reconstitution

On June 27, after the market close, Russell Investments will rebalance its entire family of indexes, including its 25 U.S. indexes.
 
Russell undertakes this Herculean task every year to “maintain true representation of global equity markets and avoid capitalization and style slippage.”
 
There are a few important dates to watch for:
 

  • Friday, June 13 – Announcement of preliminary additions and deletions to the Russell Global Index and the Russell 3000®.
  • Friday, June 20 and Friday, June 27 – Updates made to the list of preliminary additions and deletions.
  • Friday, June 27 after market close – Indexes are reconstituted.
  • Monday, June 30 – Final index membership lists posted.

 
Index memberships and rankings are determined using a company’s total market capitalization.  Although we won’t know the size of the largest and smallest companies in each newly reconstituted Russell index until June 30, here’s a look at some statistics for the current indexes
 

  • Largest company in the Russell 3000® Index: $468.5 billion market cap.
  • Smallest company in the Russell 3000® Index: $261.8 million market cap.
  • Largest company in the Russell 2000 Index: $2.5 billion market cap.
  • Smallest company in the Russell 2000 Index: $261.8 million market cap.

 
What does this reconstitution mean for public companies?  According to Nasdaq, the day Russell’s indexes are reconstituted is generally one of the heaviest trading days in the U.S. equity markets, as index and other asset managers reconfigure their portfolios to reflect the new composition of Russell’s indexes.  If your company is included in any of Russell’s indexes, be prepared for heavier than usual volumes at the end of this month.

 

Laurie Berman, Senior Vice President, lberman@pondel.com