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FTSE Russell announces schedule for annual Russell indexes reconstitution


(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.

- Ends -

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:

About FTSE Russell
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide.  FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $10 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 ETFs, structured products and index-based derivatives.

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 applying the highest industry standards in index design and governance, and embraces the IOSCO principles. FTSE Russell is also focused on index innovation and client collaboration as it seeks to enhance the breadth, depth and reach of its offering.

FTSE Russell is wholly owned by London Stock Exchange Group. For more information, visit www.ftserussell.com.

About London Stock Exchange Group
London Stock Exchange Group (LSE.L) is an international markets infrastructure business. Its diversified global business focuses on capital formation, intellectual property and risk and balance sheet management. LSEG operates an open access model, offering choice and partnership to customers across all of its businesses. The Group can trace its history back to 1698.

The Group operates a broad range of international equity, ETF, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS (Europe's leading fixed income market); and Turquoise (a pan-European equities MTF). Through its platforms, LSEG offers market participants, including retail investors, institutions and SMEs unrivalled access to Europe’s capital markets. The Group also plays a vital economic and social role, enabling companies to access funds for growth and development.

Through FTSE Russell, the Group is a global leader in financial indexing, benchmarking and analytic services with approximately $10 trillion benchmarked to its indexes. The Group also provides customers with an extensive range of real time and reference data products, including SEDOL, UnaVista, and RNS.

Post trade and risk management services are a significant part of the Group’s business operations. In addition to majority ownership of LCH.Clearnet Group, a multi-asset global CCP operator, LSEG owns CC&G, the Italian clearing house; Monte Titoli, a leading European custody and settlement business; and globeSettle, the Group’s CSD based in Luxembourg.

LSEG is a leading developer and operator of high performance technology solutions, including trading, market surveillance and post trade systems for over 40 organisations and exchanges, including the Group’s own markets. Additional services include network connectivity, hosting and quality assurance testing. MillenniumIT, GATElab and Exactpro are among the Group’s technology companies.

Headquartered in the United Kingdom, with significant operations in North America, Italy, France and Sri Lanka, the Group employs approximately 4,700 people.

Further information on London Stock Exchange Group can be found at www.lseg.com