Russell 3000 Index Gains 42 Financial Services Companies (Russell.com)

Russell 3000 Index Gains 42 Financial Services Companies
Annual Reconstitution Process Cuts 64 California-based Firms

June 24, 2005 — Forty-two financial services firms, including 21 banks, were added to the broad-market Russell 3000® Index today, replacing companies that didn't fare as well during a generally positive year on Wall Street. Other sectors that gained the most from the list of 212 newly added companies were Health Care (33), Consumer Discretionary and Services (32) and Technology (31). The complete list of additions resulting from Russell's annual index reconstitution process is available at www.russell.com/us/indexes/us/reconstitution.

Nine real estate investment trusts, 10 crude oil production companies and two casinos also flowed into the Russell 3000 today.

By contrast, 61 Health Care companies, including 21 from the drugs and pharmaceuticals industry, were removed from the index as the markets closed today.

"Our index reconstitution process objectively captures the changing fortunes of companies and industries in the U.S. equity market," said Lori Richards, senior product manager for Russell indexes. "We believe indexes need to routinely capture and reflect changes in the market in order to serve money managers and other investors as truly representative, unbiased tools."

Among the 50 states, California again led the way with 35 companies on the list of additions. Rounding out the top five states with the highest number of additions are Texas (19 companies), New York (14), Massachusetts (12) and Florida (9).

But the list of deletions shows California's economy wasn't exactly golden during the past year. Sixty-four of the 209 companies removed from the Russell 3000 today, or 30% of the total, are based in California. Other states with more than 10 deletions are Pennsylvania (14), Texas (13), Florida (12), New York (12), and New Jersey (11). Among the deletions based in California were 30 companies in the Technology sector and 21 in the Health Care sector.

"The rotation of who's in and who's out of the Russell 3000 shows the changing nature of U.S. equity markets," said Richards. "We see pockets of success and distress across the country, but by and large it was a relatively quiet year relative to the dramatic change our process captured during the Internet frenzy and subsequent crash."

Most of the deletions from the Russell 3000 are now part of the new Russell Microcap™ Index, which was launched today.

Annual reconstitution of the Russell indexes captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000. The largest 1,000 companies in the ranking comprise the Russell 1000® Index while the remaining 2,000 companies become the Russell 2000® Index. Russell posted on its website June 10 preliminary lists of companies set for addition to — or deletion from — the ranking of stocks that make up its U.S. equity indexes. Final index membership remains in place for one year.

The reconstitution process is followed closely by many investors because the Russell indexes currently have $2.5 trillion in assets benchmarked to them.

About Russell
Russell Investment Group, a global leader in multi-manager investment services, provides investment products and services in more than 35 countries. Russell manages more than $135 billion in assets and advises clients worldwide representing more than $2.3 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, which operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.

Frank Russell Company is the owner of the trademarks, service marks and copyrights related to its indexes.

Indexes are unmanaged and cannot be invested in directly.

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