Russell Announces Index Reconstitution Schedule (Russell.com)

Russell Announces 2004 Schedule for Index Reconstitution
Annual Process Keeps Benchmarks Tuned to Market Realities

TACOMA, Wash. — March 31, 2004 — Russell Investment Group this week announced its 2004 schedule for annual reconstitution of the Russell stock indexes. The schedule calls for lists of probable additions and deletions for Russell's 21 U.S. equity indexes to be posted Friday, June 11 on www.russell.com. Final index membership will take effect June 25 and remain in place for the ensuing 12-month period.

Membership in Russell's indexes is determined by objective rules, such as market capitalization rankings. Accurate benchmarks are an integral part of Russell's ongoing process to monitor more than 6,600 investment manager products worldwide.

"Reconstitution completely recalibrates Russell's U.S. indexes to today's market realities and is a key feature of truly representative benchmarks," said Lori Richards, product manager for Russell indexes. "It also serves as a clear measure of the shifts in relative valuations of value and growth stocks over the past year."

Russell Index Reconstitution Schedule

June 11 — Preliminary lists of companies being added to or deleted from the Russell 3000® Index (based on market capitalization as of May 28) will be posted on www.russell.com.
June 18 ® Updates to the preliminary lists, taking into account corporate actions and adjustments in data on companies and their capitalizations, will be posted.
June 25 — Any additional updates to the preliminary lists will be posted on the web site.
July 6 — Newly rebalanced membership lists (alphabetical, without shares) for the Russell 3000 as well as the Russell 1000® Index and Russell 2000® Index will be posted.

The annual reconstitution of Russell's 21 U.S. equity indexes captures the 3,000 largest U.S. stocks as of May 28, ranking them by market capitalization to create the broad market Russell 3000 Index. The largest 1,000 companies in the ranking will comprise the large cap Russell 1000 Index while the remaining 2,000 companies will comprise the small cap Russell 2000 Index.

After the preliminary lists of additions and deletions are created, the reconstitution process continues through June with any updates to the original lists set for June 18. During this time capitalization rankings are adjusted for mergers and other corporate actions. The final, official membership lists for the Russell 3000, Russell 1000 and Russell 2000 will be available July 6 on www.russell.com.

Russell issued a news release Feb. 5 to announce a shift in when the newly reconstituted indexes take effect. The shift, which was based on recommendations from the investment services industry, moves the effective date each year to the last Friday in June, instead of the last day in June. This change gives the industry additional time over the weekend to manage any increase in stock trading volumes that occurs as funds and managers adjust for the new membership of the respective indexes.

While Russell's indexes cannot be invested in directly, about $365 billion is invested in passive funds that use them as a model; increasing 60% in 2003. The Russell 3000 (including the Russell 3000® Growth Index and Russell 3000® Value Index) accounts for about $156 billion of the total, while the large cap Russell 1000 (including the Russell 1000® Value Index and Russell 1000® Growth Index) accounts for about $114 billion and the small cap Russell 2000 (including the Russell 2000® Growth Index and Russell 2000® Value Index) accounts for about $42 billion. Another measure, exchange-traded funds based on Russell indexes, shows similar growth. They garnered $4.4 billion in 2003 and now total close to $18 billion.

About Russell
Russell Investment Group, a global leader in multi-manager investing, provides investment products and services in more than 35 countries. Russell manages more than $100 billion in assets and advises clients worldwide representing more than $1.8 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.

Small company issues are subject to considerable price fluctuations and are more volatile than large company stocks. Small cap funds may involve considerably more risk than funds investing in larger-cap companies.

Russell indexes are unmanaged and cannot be invested in directly.

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