SOURCE: Russell Investments

Russell Investments

June 30, 2015 16:49 ET

Happy New Year's Day Russell Indexes: FTSE Russell Completes Annual Russell Indexes Reconstitution

SEATTLE, WA--(Marketwired - Jun 30, 2015) - At the U.S. market's close on Friday, June 26, FTSE Russell, a leading global index provider, completed its closely-watched annual Russell indexes reconstitution. And on Monday of this week, the newly rebalanced Russell indexes began a new year.

The final lists of companies that have joined or left the U.S. broad-market Russell 3000® Index, Russell Microcap® Index and Russell Global Index were posted to the Russell indexes reconstitution website after the U.S. markets closed on Friday. And on Monday, final membership lists for these indexes including breakouts for the U.S. small-cap Russell 2000® Index and Russell Midcap® Index were posted.

Rolf Agather, Managing Director North America Research, FTSE Russell, said:
"The annual Russell reconstitution is a critical process for FTSE Russell to ensure that the Russell indexes continue to accurately reflect the current investable opportunity set in the market. Russell reconstitution is also a critically important time for our clients, who represent about $5.7 trillion in assets benchmarked and more than $800 billion in passively managed assets in mutual funds, exchange traded funds and institutional accounts following the Russell indexes." 

2015 Russell Index Reconstitution - Highlights:

Trading Volume

  • In the twelfth annual Nasdaq Closing Cross, which brings together buy and sell interest in specific Nasdaq stocks and executes all shares for each stock at a single price at Russell reconstitution, approximately 787 million shares representing $21.1 billion changed hands in 0.4 seconds across some 2,583 Nasdaq-listed stocks.

  • At the New York Stock Exchange (NYSE), where a Closing Auction on the trading floor matches orders via a combination of advance technology and human judgment, closing volume of approximately 1.1 billion shares was the second highest NYSE closing this year.

Market, Sector & Style Moves

  • A nearly 10% rise in the breakpoint between the US large-cap Russell 1000® Index and US small-cap Russell 2000® Index to $3.4 billion, a third consecutive record high.

  • A very strong year for healthcare stocks, with the sector returning 30% within the US broad market Russell 3000® Index. Eleven of the 29 stocks moving up from the Russell 2000 to the Russell 1000 are healthcare stocks, nine of them biotech. Biotech firms Receptos Inc. (RCPT) and Bluebird Bio (BLBD) moved up substantially, coming from the Russell Microcap® Index. Healthcare companies represent 48 of the 177 new additions to the Russell 2000 at reconstitution.

  • A challenging year for energy stocks, particularly in the small cap space. The Russell 2000 Energy Index posted a -43.5% return, while the Russell 1000 Energy Index lost 16.1%. Within the Energy sector, Halliburton Co. (HAL) and Pioneer Natural Resources (PXD) shift from a 100% growth allocation to 100% value, while Schlumberger Ltd. (SCL) and EOG Resources (EOG) move away from a 100% growth orientation to around 90% value. These four companies comprise four of the largest 10 additions this year to the Russell 3000 Value Index by weight.

  • Interestingly, second largest company Microsoft (MSFT) continues its shift to value, from 100% growth in 2013 to 65% growth in 2014 and a 57%/43% growth to value split this year.

Movers & Shakers

  • Apple, Inc. (AAPL) remains the largest company in the Russell indexes at $750.5 billion market capitalization, nearly double the size of #2 Microsoft, Inc. ($379.1 billion).

  • The Russell 1000® Index adds 48 new names this year, with 29 moving up from the Russell 2000® Index, 17 newly eligible companies and two new IPOs Black Night Financial Services (BKFS) and GoDaddy, Inc. (GDDY) directly entering the U.S. large-cap index.

  • The U.S. small-cap Russell 2000® Index adds 20 new IPOs at reconstitution, including eight healthcare companies. Recognizable Russell 2000 IPO additions include BoJangles (BOJA), King Digital (KING), Lululemon (LULU), Etsy Inc (ETSY) and Party City (PRTY).

  • New Russell indexes reconstitution rules recognizing secondary share classes lead to the addition of secondary share classes for some very familiar names, including Viacom and 21st Century Fox.

About FTSE Russell:

FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 80 countries, covering 98% of the investable market globally and trading on over 25 exchanges worldwide.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Leading asset owners, asset managers, ETF providers and investment banks use FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance. FTSE Russell is also focused on index innovation and client collaboration as it seeks to enhance the breadth, depth and reach of its offering.

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