The Russell Equal Weight Indexes offer a unique and practical alternative to conventional equal weighted indexes. Rather than simply assigning an equal weight to each constituent of the index, Russell's sector equal weight index methodology equally weights each sector within the index and then equally weights the companies within each sector. This innovative approach provides greater diversification benefits than traditional equal weighted indexes.
Equal weighting randomizes economic factor mispricing as well as prevents a few large companies from driving the index's performance. Russell Equal Weight Indexes offer enhanced protection by equally weighting across nine sectors as defined by the RGS Sector Scheme (Consumer Discretionary, Consumer Staples, Energy, Financial Services, Health Care, Materials and Processing, Producer Durables, Technology, and Utilities) to control for sector risk. Russell Equal Weight Indexes are re-weighted on a quarterly basis.
Index rules should be read in conjunction with supportingFTSE Russell noticesThese notices advise of advance changes in index methodology, which may not be reflected in index rules until the change effective date. The notices may also communicate revisions in index treatment in the period up to a rule change.