Each June, the entire family of Russell US Indexes is realigned and recalibrated to reflect market changes in the last year. Roughly $9 trillion in assets under management (AUM) are benchmarked to or invested in products based on the Russell US Indexes. Approximately $16 trillion in assets are currently benchmarked to indexes offered by FTSE Russell.
Over the weekend the FTSE Russell posted its official preliminary lists of companies set to enter or leave the US broad-market Russell 3000 Index and the Russell Microcap Index when the Russell US Indexes complete their annual rebalance after US equity markets close on Friday, June 22.
Investors can find the reconstitution list on the FTSE Russell website.
As of May 11, the rank day for the 2018 Russell US Indexes reconstitution, the total market capitalization of the US equity market as reflected by the Russell 3000 Index is $30.7 trillion, a nearly 13% rise from the 2017 reconstitution.
At the same time, the total market capitalization of the US large-cap Russell 1000 Index stands at $28.2 trillion, a 13% increase since 2017 reconstitution. The total market capitalization of the US small-cap Russell 2000 Index is $2.5 trillion as of May 11, a 9% increase from last year.
Alec Young, Managing Director of Global Markets Research, FTSE Russell, commented:
While market volatility has increased YTD relative to 2017’s historic calm, economic growth, strong corporate fundamentals and still benign Fed monetary policy have largely offset geopolitical uncertainty, including around trade, as well as concern about higher interest rates. With many of 2018’s equity headwinds being international in nature, the Russell 2000 Index has outperformed the large-cap Russell 1000 Index, in large part due to small caps’ lower international sales exposure. Being more domestic has insulated small caps from trade tensions, geopolitical worries and the earnings drag stemming from a stronger dollar. Being less global also gives small caps more exposure to several US market positives including tax reform, increasing deregulation and faster US economic growth relative to weaker recoveries in Europe and Japan. All these tailwinds are helping drive faster profit growth for small caps relative to their blue chip counterparts, helping fuel YTD leadership.