The 24th annual rebalance of the Russell/Nomura Total Market Index, capturing 98% of the Japanese equity market, was recently completed. A news release from Nomura Securities summarizes the reconstitution process, in which the entire family of Russell/Nomura indexes is recalibrated to better reflect equity market developments in Japan over the last year.
Three notable developments underscore this year’s reconstitution:
- Growth outshined value. The Russell/Nomura Total Market Index was rebalanced just under 1% toward Value at this year’s reconstitution to account for a year in which growth-oriented stocks outperformed value-oriented stocks in Japan.
- Large-caps led. During a volatile year for Japanese equities in which the total market cap of the Russell/Nomura Total Market Index was down approximately 3%, it is not surprising that investors were more interested in large-cap stocks. For the year ended November 14, the Russell/Nomura Large Cap Index returned 6% on a JPY total return basis, as compared to a 3.4% and 2.3% return for the Russell/Nomura Mid Cap and Small Cap Indexes, respectively.
- Information & Communication and Service sectors headline new entrants. These two sectors were the most prominent joiners for the Russell/Nomura Indexes at this year’s reconstitution. Of the 28 new entrants to the Russell/Nomura Prime Index, 10 were from Information & Communications and five were from Services. And of the 56 stocks entering the Russell/Nomura Microcap Index, 14 came from Information & Communications and nine came from Service.
Hiromichi Tamura, head of Asia-Pacific research, FTSE Russell:
“The annual reconstitution of the Russell/Nomura Total Market Index is a window into key trends at work in the Japan equity market over the past year. And with Russell/Nomura index data going back to 1979, our clients can now draw on four decades of Japanese equity market benchmark data, providing a valuable foundation for research, insight and exposure into Japanese equity markets.”
Catherine Yoshimoto, director, product management, FTSE Russell:
“We are delighted to complete another annual reconstitution with our valued index partners at Nomura Securities. As markets change, our annual reconstitution process ensures the Russell/Nomura indexes remain a relevant reflection of the Japan equity market for investors.”
Visit the Russell/Nomura indexes and the annual reconstitution page for more information.
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