Russell Sets Schedule For 2007 Index Reconstitution
Annual process realigns global stock benchmarks to market realities
 Tacoma, WA — April 3, 2007 — Russell Investment Group has set the annual schedule to reconstitute its U.S. and global index families. The company will post lists of probable additions and deletions to its website, www.russell.com/Indexes, after the markets close on Monday, June 11. Final index membership will take effect on Friday, June 22 and remain in place for the ensuing 12-month period.
With the launch of the Russell Global Index in 2007, Russell offers a complete worldwide opportunity set that covers 98% of the global investable universe. Membership in Russell's U.S. and global index families is determined by objective rules, such as market capitalization rankings. Accurate benchmarks are an integral part of Russell's ongoing process to monitor 6,500 investment manager products worldwide for Russell's $200 billion active investment management business.
"Reconstitution is a key feature of truly representative benchmarks," said Lori Richards, director of client service for Russell indexes. "Russell's unique process recalibrates all of Russell's indexes to today's market realities, ensuring that stocks are moved into the right 'buckets' to truly represent small-cap, large-cap and all-cap segments of the global marketplace. For the U.S. market, reconstitution also serves as a clear measure of the shifts in relative valuations of value and growth stocks over the past year."
The detailed methodology that governs the annual reconstitution process, which is posted on the website, will include the following changes this year:
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- For the U.S. indexes, benefit-driven incorporations will be reviewed for eligibility. (See 12-14-06 announcement: Russell fine-tunes index rule on inclusion eligibility.)
- Banding: Existing index members on the border between new market cap breakpoints will remain in their existing index.
- For style indexes: Additional adjustments to book value will be made to account for FASB 158.
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Russell Reconstitution Schedule |
| June 11 (after markets close) |
Russell will post preliminary lists of companies being added to—or deleted from—the total-market Russell Global Index, Russell 3000® Index and Russell Microcap® Index (based on market capitalization as of May 31) on www.russell.com/indexes. |
| June 15 and June 22 |
Russell will post updated preliminary lists of adds and deletes, taking into account data adjustments on companies and their capitalizations. |
| June 22 |
Newly reconstituted indexes will take effect after the close of U.S. equity markets. |
| June 25 |
Newly reconstituted membership lists for the Russell Global Index and the Russell 3000® Index, Russell 1000® Index, Russell 2000® Index and Russell Microcap® Index, all in alphabetical order, will be posted on www.russell.com/indexes. |
The annual reconstitution of Russell's U.S. indexes captures the 4,000 largest U.S. stocks at the end of May, ranking them by market capitalization. After the new banding rules are applied, the largest 1,000 companies in the ranking comprise the large-cap Russell 1000, while the following 2,000 companies comprise the small-cap Russell 2000 and the bottom 2,000 stocks move into the Russell Microcap.
The Russell/Nomura Indexes in Japan are reconstituted annually in the fall.
About Russell
Russell Investment Group, a global leader in multi-manager investment services, provides investment products and services in 44 countries. Russell manages $200 billion in assets and advises clients worldwide representing more than $2.4 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, 253-439-1858
Russell Investment Group, a Washington, USA corporation, operates through subsidiaries worldwide.
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