Skip to main content

You are here

Blog Listing Page

Index IDEA: Russell reconstitution highlights US equity surge since election

US equities, as reflected by the US large-cap Russell 1000® Index and the US small-cap Russell 2000® Index, have risen +21.7% and +27.6% from the completion of the 2016 Russell US indexes reconstitution through Monday, June 12. Yet the lion’s share of these index returns – +15.1% and +19.7%, respectively, have come in the period since the US presidential election on November 8 of last year.

Mat Lystra, Senior Index Research Analyst, FTSE Russell:

“It was a tale of two markets this year in US equities as reflected by the Russell US Indexes. The market exhibited strong growth in the past year, yet the majority of this growth has come from the ‘Trump Bump’ following the US presidential election.”


Steven DeSanctis, SMID Cap Strategist, Jefferies & Co.:

“It looks like we could be in for another style shift, as value stocks have recently made a comeback compared to growth stocks. However, [small cap] growth stocks still tend to trade at lower price-to-earnings multiples [relative to their historical average] than [small cap] value stocks while [tending to deliver higher] relative earnings growth than their value counterparts. With that said, buckle up because the ride could be bumpy.  As for the Russell US Indexes reconstitution, we have the largest stock in the Russell 2000 Index at $4.56 billion market cap as of the end of May with small caps seeing an increase in weight from groups that have lagged since the election, mainly Energy. Also, a number of companies that have emerged from bankruptcy will be added back to the Russell 2000.”

----------------

© 2017 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”) and (4) MTSNext Limited (“MTSNext”). All rights reserved.

FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, or FTSE TMX.

All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.

Views expressed by Mat Lystra and Steven DeSanctis  are as of June 14th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the indexes for any particular purpose to which they might be put.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/or their respective licensors.

Blog Listing Page