Benchmark Survey: More Institutional Products Use Russell Indexes
Eight of the top 10 U.S. benchmarks are Russell indexes
TACOMA, Wash. — Sept. 30, 2003 — Russell's family of 21 U.S. indexes now ranks as the most widely used set of performance benchmarks among institutional investment products, which include funds used by corporate pension plans and other institutional investment organizations. A survey measuring market share of various stock index families shows Russell holding an industry-leading 45.5% share of the institutional market for benchmarks. For the first time, market share held by Russell indexes have surpassed that of all other index providers in terms of usage for institutional domestic equity products.
The survey found more than $920 billion of assets now are benchmarked to Russell indexes.
When U.S. equity indexes are ranked by usage, Russell indexes represent eight of the top 10 and 11 of the top 13 benchmarks. The small-cap Russell 2000® Index ranks as the second most commonly used U.S. equity benchmark in the U.S. institutional market.
These rankings were determined by a recent Russell study of 2,524 U.S. equity products listed in Nelson Information's MarketplaceWeb database.
Russell's family of indexes was the only major set of benchmarks to gain market share in the number of products this year, continuing a trend identified by Nelson in its original survey of benchmark usage in 1998. Russell's market share has increased from 18.5% in 1996, 27.9% in 1998 and 39.3% a year ago.
"Russell created its indexes to be used as benchmarks by institutional investors," said Kelly Haughton, strategic director, Russell Indexes. "We are heartened to see that Russell indexes now are the benchmarks of choice among investment managers of institutional U.S. equity funds."
The strongest shift among Russell indexes was the surge in use of Russell's growth and value style indexes. The Russell 2000® Growth Index, for example, now is the benchmark of choice for 174 investment products, increasing from 31 in 1996, 81 in 1998 and 116 in 2002.
Individually, the top 10 U.S. equity benchmarks ranked by usage are the Standard & Poors 500 Index, Russell 2000® Index, Russell 1000® Value Index, Russell 2000® Growth Index, Russell 1000® Growth Index, Russell 2000® Value Index, Russell Midcap® Growth Index, S&P Mid-Cap 400 Index, Russell 2500™ Index and the Russell Midcap® Index.
Russell originally developed and still uses its indexes as tools to help pension plan sponsors and other investors evaluate the performance of active investment managers. The indexes also help investors assemble and evaluate a total portfolio by using benchmarks that reflect particular market segments based on objective criteria, such as capitalization and tradable shares, rather than subjective decisions of an index committee.
About Nelson Information
Nelson Information, based in Port Chester, New York, has been a leader in providing information and software to the global institutional investment community for more than 25 years. Nelson's product line includes MarketPlaceWeb, proprietary databases, and a full line of comprehensive directories covering all facets of the institutional investment industry. For more information, go to www.marketplaceweb.com.
About Russell
Russell Investment Group, global leader in multi-manager investing, provides investment products and services in more than 35 countries. Russell manages more than $76 billion in assets and advises clients worldwide representing more than $1.6 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo.
Contact: Steve Claiborne, 253-594-1858
Russell Investment Group is a registered trade name of Frank Russell Company, a Washington, USA corporation, operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.
The indexes are unmanaged and cannot be invested in directly. Frank Russell Company and Standard & Poor's Corporation are the owners of the trademarks, service marks, and copyrights related to their respective indexes.
Russell 2000® Index: Measures the performance of the 2,000 smallest companies in the Russell 3000® Index, representative of the U.S. small capitalization securities market.
Russell 1000® Value Index: Measures the performance of those Russell 1000® Index securities with lower price-to-book ratios and lower forecasted growth values, representative of U.S. securities exhibiting value characteristics.
Russell 2000® Growth Index: Measures the performance of those Russell 2000 securities with higher price-to-book ratios and higher forecasted growth values, representative of U.S. securities exhibiting growth characteristics.
Russell 1000® Growth Index: Measures the performance of those Russell 1000 securities with higher price-to-book ratios and higher forecasted growth values, representative of U.S. securities exhibiting growth characteristics.
Russell 2000® Value Index: Measures the performance of those Russell 2000® Index securities with lower price-to-book ratios and lower forecasted growth values, representative of U.S. securities exhibiting value characteristics.
Russell Midcap® Growth Index: Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth, representative of U.S. securities exhibiting growth characteristics.
Russell 2500™ Index: Measures the performance of the 2,500 smallest companies in the Russell 3000® Index, representative of the U.S. small to medium-small capitalization securities market.
Russell Midcap® Index: Measures the performance of the 800 smallest securities in the Russell 1000® Index.
Russell 3000® Index: Measures the performance of the 3,000 largest U.S. securities based on total market capitalization.
S&P 500 Index: An index, with dividends reinvested, of 500 issues representative of leading companies in the U.S. large cap securities market.
S&P Midcap 400 Index: An index of 400 mid-size domestic equity company stocks in various industries; it is a market-value weighted index.
Date of first use: Sept. 30, 2003. Rc #3325
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