(London, New York): FTSE Russell, the global index provider, today announced the 2016 schedule for the annual reconstitution of its Russell indexes. The closely watched annual process, which also includes the Russell global indexes, is designed to capture and reflect market shifts that have occurred in the past year to ensure investors continue to have the most accurate market benchmarks.

Ron Bundy, CEO North America Benchmarks, FTSE Russell, said:
“Annual Russell reconstitution is a critical time for our indexes, particularly for our widely followed US large-cap Russell 1000® Index and US small-cap Russell 2000® Index, and it is ‘all hands on deck’ for our global index teams each year to ensure a smooth process and orderly conclusion. This event and related adjustments essentially redefine, refresh and recast the entire Russell family of indexes for the next 12 months and help our investor clients re-evaluate the equity landscape with a fresh perspective.”

Performed since the Russell indexes were introduced in 1984, Russell Reconstitution fully realigns the indexes to ensure that they continue to accurately reflect the global markets. Russell index updates reflect changes in market capitalization, sector composition, company rankings and style orientation for the last year.

With approximately $6 trillion in assets tracking the Russell indexes as of December 31, 2015, Russell Reconstitution is a notable event for US equity investors.

The 2016 Russell Reconstitution schedule is as follows:

  • May 27 – “rank day” – Russell index membership eligibility for 2016 reconstitution determined from constituent values at market close.
  • June 10 – preliminary membership lists (including adds & deletes) posted to the FTSE Russell website after 6:00 PM US eastern time.
  • June 17, 24 – updated membership lists (including adds & deletes) posted to the FTSE Russell website after 6:00 PM US eastern time.
  • June 24 – reconstitution is final after equity markets close.
  • June 27 – equity markets open with newly reconstituted Russell indexes.

As usual, FTSE Russell will make certain methodology adjustments at this year’s Russell reconstitution, fine tuning the indexes to provide the most accurate reflection of the investable market. Notable adjustments this year include:

  • Primary Vehicle. As of 2016 reconstitution, share classes not qualifying for eligibility independently will no longer be aggregated with the shares of the primarily vehicle and will be removed from available shares. The only exception to this rule is Berkshire Hathaway class A, which will continue to be rolled up into its primary share class.
     
  • Market Capitalization (Free Float) Adjustments. All officer and director holdings, corporate holdings of listed shares and ESOP / LSOP shares will be considered unavailable and removed from the indexes. Private holdings representing more than 10% and institutional or government pension holdings representing greater than 30% of a company’s shares will also be removed.
     
  • Definitions of “Red Chip” and “P Chip.” FTSE Russell has updated requirements for determination of primary reported asset and revenues as well as updated definitions of “Red Chip” and “P Chip” companies. Complete details are included in the published Construction and Methodology guide.

The treatment of corporate actions, including spin-offs and dividend distributions between index company constituents, will also be enhanced for more accurate representation.

FTSE Russell index expertise and products are used by institutional and retail investors globally and approximately $10 trillion is currently benchmarked to its indexes. Other examples of leading edge index reconstitutions for FTSE Russell include the FTSE Global Equity Index Series and UK Index Series quarterly reviews, which happen later this week, and the FTSE Annual Country Classification Review for global markets, which concludes each year in September.

A full summary of planned updates along with background information on reconstitution can be found on the reconstitution home page on ftserussell.com.

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For further information:

Media    
Harry Stein, +44 (0)20 7797 3593; HStein@lseg.com
Tim Benedict, + 1 212 314 1220: TBenedict@lseg.com
newsroom@lseg.com

Notes to editors:

:

FTSE Russell is a leading global provider creating and managing a wide range of indexes, data and analytic solutions to meet client needs across asset classes, style and strategies. Covering 98% of the investable market, FTSE Russell indexes offer a true picture of global markets, combined with the specialist knowledge gained from developing local benchmarks around the world.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. More than $15 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create investment funds, ETFs, structured products and index-based derivatives. FTSE Russell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on index innovation and customer partnership applying the highest industry standards and embracing the IOSCO Principles. FTSE Russell is wholly owned by the London Stock Exchange Group.

For more information, visit www.ftserussell.com.

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No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this communication 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.

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