The Russell US Indexes are designed to reflect the ever-changing US equity market, and the annual reconstitution process is critical to maintaining accurate representation.
During this highly anticipated market event, the breakpoints between large, mid, and small cap are redefined to ensure market changes that have occurred in the preceding year are captured. Companies are also re-evaluated to determine where they rank along the investment styles spectrum.
Reconstitution changes and the newly recalibrated indexes take effect after the close of US equity markets on Friday, June 28, 2024; the new Russell US Indexes membership, weights and performance will be reflected from the open of US equity markets on Monday, July 1, 2024.
As of December 2023, approximately $10.5 trillion in assets were benchmarked to a Russell index, and more than $134 billion traded across US exchanges at the close of 2023 recon.
Key takeaways:
- This year’s Russell reconstitution (“recon”) revealed that the investable US equity market increased in size, with the total market cap of the Russell 3000® Index up 20% from $44.2 trillion as of last year’s rebalance to $53.0 trillion based on this year’s rank day (April 30, 2024)
- The total market cap of the ten largest companies increased since last year’s reconstitution, from a combined $10.9 trillion to $15.4 trillion
- As of 2024 recon, there are six companies above $1 trillion in size (total company market capitalization), with four of the companies above $2 trillion in size, compared to four companies above $1 trillion in total company market cap in 2023
- The largest ten companies in the Russell US Indexes shuffle positions, starting with Microsoft taking back the top spot from Apple, which had been the largest company from 2021 through 2023. The third largest company Nvidia replaces Alphabet (now the fourth largest company), and Amazon.com now in fifth place replaces Berkshire Hathaway (now ranked seventh). Meta is ranked sixth, up one rank from 2023. Broadcom, a semiconductor company ranked as the ninth largest company this year, has the most significant jump in rank among the largest ten companies, from 24th in 2023
- The companies known as the “Magnificent Seven” (Microsoft, Apple, Nvidia, Alphabet, Amazon.com, Meta, Tesla) increased in size since 2023 recon, with the exception of Apple whose total company market cap decreased 2% as of rank day
- The breakpoint between the large cap Russell 1000® and small cap Russell 2000® indexes increased 9.5% from $4.2 billion in 2023 to $4.6 billion
