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Russell Indexes


Russell's family of global equity indexes, including the industry-leading U.S. equity indexes (note that Russell uses "indexes" rather than "indices"), allows investors to track the performance of distinct market segments worldwide.

Many investors use mutual funds or exchange-traded funds based on the Russell Indexes as a way of gaining exposure to certain portions of the U.S. stock market. Additionally, many investment managers use the Russell Indexes as benchmarks to measure their own performance. Russell's innovative index design has led to more assets benchmarked to its U.S. index family than all other U.S. equity indexes combined. As of May 2007, Russell's indexes had US$4 trillion in assets benchmarked to them and accounted for 52 percent of assets benchmarked by institutional investors.

The main U.S. index is the Russell 3000® Index, which is divided into several sub-indexes, including the well-known small-cap Russell 2000® Index. The list of stocks in the Russell 3000 is compiled by the Tacoma, Washington-based Russell Investment Group. Using a rules-based and transparent process, Russell forms its indexes by listing all companies in descending order by market capitalization adjusted for float, which is the actual number of shares available for trading. In the United States, the top 3,000 stocks (those of the 3,000 largest companies) make up the broad-market Russell 3000 Index. The top 1,000 of those companies make up the large-cap Russell 1000® Index, and the bottom 2,000 (the smallest companies) make up the small-cap Russell 2000 Index.


Russell's index story began in 1984 when the firm launched its family of U.S. indexes to measure U.S. market segments and hence better track the performance of investment managers. The resulting methodology produced the broad-market Russell 3000 Index and subcomponents such as the small-cap Russell 2000 Index.

In January 2007, Russell applied its pioneering index methodology to the world's equity markets and introduced a family of global indexes. Similar to how the Russell 3000 captures nearly all of the U.S. equity market, the Russell Global Index captures 98% of the global equity market.

Today, the Russell Global Index reflects the performance of nearly 11,000 stocks worldwide, including the Russell 3000 Index as its U.S. component and the Russell/Nomura Total Market Index as the Japan component.

Construction Methodology

The Russell Indexes are objectively constructed based on transparent rules. The broadest U.S. Russell Index is the Russell 3000 Index which contains the 4,000 largest (by market capitalization) companies incorporated in the U.S., plus (beginning with the 2007 reconstitution) companies incorported in an offshore financial center that have their headquarters in the U.S. - a so-called Benefits driven incorporation. Each Russell Index is a subset of the Russell 3000 Index and broken down by market capitalization and style. The members of the Russell 3000 Index and its subsets are determined each year during annual reconstitution and enhanced quarterly with the addition of Initial Public Offerings (IPOs). The Russell 3000 Index represents approximately 99 percent of the U.S. equity market. Russell excludes stocks trading below US$1; stocks that trade on the pink sheets and OTC Bulletin Board; closed-end mutual funds, limited partnerships, and royalty trusts; and non-U.S. incorporated stocks (other than the benefits driven incorporations described above), foreign stocks, and American Depositary Receipts (ADRs). Also, Berkshire Hathaway is excluded despite its large market capitalization because its high price per share limits its liquidity.

Annual Reconstitution

Russell rebalances its indexes once each year in June, called reconstitution. The reconstitution consists of updating the global list of investable stocks and assigning them to the appropriate indexes. The Russell indexes do not immediately replace a company that merges with another firm or has its stock delisted. However, Russell adds Initial Public Offerings (IPOs) on a quarterly basis, capturing these stocks in a systematic way.

Primary Indexes

In addition to the primary indexes listed below, Russell publishes Value and Growth versions of each U.S. index. This divides each index roughly in half, separating companies classified as value stocks from those classified as growth stocks. Companies can appear in both the value and growth versions of an index, though the total number of shares between the value and growth versions will equal the number in the main index. The primary indexes are:

  • Russell 3000 Index: The broad U.S. stock market, including both large and small capitalization companies.
  • Russell 1000 Index: The large-cap index of the top 1,000 stocks in the Russell 3000 Index.
  • Russell 2000 Index: The small-cap index of the bottom 2,000 stocks in the Russell 3000.
  • Russell Top 200 Index: The mega-cap index of the very largest 200 stocks in the Russell 3000.
  • Russell Top 50 Index: Measures the performance of the 50 largest companies in the Russell 3000 Index.
  • Russell Midcap Index: The bottom 800 stocks in the Russell 1000 Index. The Russell Top 200 Index plus the Russell Midcap Index yields the Russell 1000.
  • Russell 2500 Index: A mid- to small-cap index of the bottom 2,500 stocks in the Russell 3000.
  • Russell Microcap Index: A micro-cap index of the stocks ranked from 2,001-4,000 in the Russell indexing universe, consisting of capitalizations ranging from $50 million to $2.5 billion. Hence, this is an index of the 1,000 smallest Russell 3000 stocks, plus 1,000 smaller stocks.
  • Russell Small-Cap Completeness Index: The index includes stocks from the Russell 3000 Index that do not appear in the S&P 500 Index. An investor wishing to use the Russell 3000 Index as a measure of exposure to the complete U.S. stock market who wishes to use the S&P 500 Index rather than the Russell 1000 Index as a way of getting exposure to large-cap companies can combine the S&P 500 Index with the Russell Small Cap Completeness Index to get the Russell 3000 Index.


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