Dow Jones and Russell to Perform Annual Index Rebalancing

Dow Jones and Russell to Perform Annual Index Rebalancing

Dow Jones and Russell to Perform Annual Index Rebalancing

Dow Jones Indexes today announced that it will release the results of its annual update for the Dow Jones Titans index family on June 1, after the close of U.S. markets.

Stocks in the Dow Jones Global Titans 50, the Dow Jones Asian Titans 50, and the Dow Jones Sector Titans indexes may be added or deleted at that time. The announced changes will become effective after the close of trading on June 15.

Currently, State Street Global Advisors offers a streetTRACKS Dow Jones Global Titans Index exchange-traded fund.

To view the performance of the Dow Jones Sector Titans indexes, click here.

Russell Rebalancings

Index provider Frank Russell will post lists of probable additions and deletions for the Russell 3000 index on June 8. The rebalancing process continues through June, with additional updates set for June 15 and 22. Capitalization rankings are adjusted for mergers and other corporate changes during this period. Final membership lists for the indexes will be posted on July 9.

Membership in the Russell indexes is determined strictly by market capitalization. The Russell 3000 index contains the 3,000 largest U.S. stocks, ranked by market capitalization. The 1,000 largest companies in the index are teased out to form the Russell 1000 index. The remaining 2,000 companies comprise the small-cap Russell 2000 index.

As the Wall Street Journal today reported, the small-cap Russell 2000 rebalancing should be particularly interesting, since many former tech darlings hit hard by the market downturn will join the index. One Merrill Lynch small-cap stock analyst estimated that the Russell 2000's tech weighting will increase from 9% to 13%.

Here's what the turnover looked like after last year's rebalancing:

  • Russell 3000 Index - 624 companies added, 348 deleted
  • Russell 1000 Index - 194 companies added, 151 deleted
  • Russell 2000 Index - 684 companies added, 451 deleted

Russell estimates that over $175 billion is currently invested in passive funds tied to Russell's 21 U.S. indexes - with $75 billion in the Russell 3000, $70 billion in the Russell 1000, and $25 billion in the Russell 2000. Those estimates include the Growth and Value subset indexes for each.