Close Menu
    Facebook LinkedIn YouTube Instagram X (Twitter)
    Blue Tech Wave Media
    Facebook LinkedIn YouTube Instagram X (Twitter)
    • Home
    • Leadership Alliance
    • Exclusives
    • Internet Governance
      • Regulation
      • Governance Bodies
      • Emerging Tech
    • IT Infrastructure
      • Networking
      • Cloud
      • Data Centres
    • Company Stories
      • Profiles
      • Startups
      • Tech Titans
      • Partner Content
    • Others
      • Fintech
        • Blockchain
        • Payments
        • Regulation
      • Tech Trends
        • AI
        • AR/VR
        • IoT
      • Video / Podcast
    Blue Tech Wave Media
    Home » Russell reorganisation will be completed on Friday
    Stock-big-data-diagram
    Stock-big-data-diagram
    AI

    Russell reorganisation will be completed on Friday

    By Zora LinJune 27, 2024Updated:June 28, 2024No Comments4 Mins Read
    Share
    Facebook Twitter LinkedIn Pinterest Email
    • The update covers a range of Russell indexes, such as the Russell 1000 large-cap index and the Russell 2000 small-cap index, which together make up the Russell 3000 index.
    • Stocks that benefit from AI, such as Nvidia, are up 180 percent from last year as of Monday, while AMD shares are up more than 230 percent.

    OUR TAKE 
    The Russell Index restructuring plays a key role in ensuring consistency, transparency, and reliability of U.S. stock market indicators for global investors. The annual adjustment of index components is one of the most important drivers of short-term changes in supply and demand in the U.S. stock market, often resulting in a large price change for a particular company or industry sector.
    –Zora Lin, BTW reporter

    What happened

    Investors are bracing for a final shake-up of the FTSE Russell benchmark index on Friday, with the wild run-up in AI-related stocks over the past year expected to have a huge impact on their final shape. The Russell restructuring will take effect after the close of trading on Friday.

    Since last year’s restructuring, the runaway rise of stocks seen as likely to benefit from AI, such as Nvidia and Super Micro Computer, is expected to have a significant impact on the Russell’s growth and value index this year.

    The update covers a range of Russell indexes, such as the Russell 1000 large-cap index and the Russell 2000 small-cap index, which together make up the Russell 3000 index. This once-a-year change prompts fund managers to adjust their portfolios to reflect the new weights and components.

    Steven DeSanctis, equity strategist at Jefferies in New York, says the outperformance of growth stocks means there will be fewer than 400 growth stocks in the Russell 1000, and he estimates the weighting of the top five growth stocks will be more than 44 per cent.

    In addition, the weighting of the Russell 2000 will change, with DeSanctis expecting a 4.6% drop in technology stocks and a 3.4% rise in health care stocks. Bryant vancronkite, senior portfolio manager at Allspring Global Investments, said about two-thirds of the Russell 1000 is made up of technology and communications services.

    Also read: Nvidia signs AI deal in Middle East, says Ooredoo CEO

    Also read: NVIDIA dethrones Microsoft as the world’s leading tech giant

    Why it’s important

    The Russell Index is a weighted average of market capitalization issued by Frank Russell of Washington State and is one of the best measures of the stock price performance of small companies. It is a widely followed index that tracks large-cap and small-cap stocks in the U.S. market, and its constituents must be U.S. companies, covering 63 countries and 22 territories around the world.

    “We are there as an index provider to reflect the market. That’s what we’ve been hearing from our clients that they want, “said Catherine Yoshimoto, director of product management for FTSE Russell U.S. Indices.

    The reason for restructuring and rebalancing is the change and development of the market. The annual restructuring ensures that the Russell Index represents changes in the U.S. stock market over the previous year in a transparent, open, rules-based manner. Restructuring poses risks for investors who follow the Russell index to ensure that losses are minimized against the benchmark. Similarly, a correction would create opportunities for investors seeking to take advantage of the price volatility that might result from an index restructuring.

    “In theory, the increased concentration resulting from rebalancing will put buying pressure on these stocks, but in practice the portfolio diversification rules should mitigate this impact,” UBS analysts said in a note to clients. They point out that this will increase tracking error for growth managers.

    AI stocks FTSE Russell Russell reconstitution
    Zora Lin

    Zora Lin is an intern news reporter at Blue Tech Wave specialising in Products and AI. She graduated from Chang’an University. Send tips to z.lin@btw.media.

    Related Posts

    Orange Business: Unveils defence division

    July 11, 2025

    Africell: Supports African women in arts and culture

    July 11, 2025

    AFRINET SA: Expands digital services in the DRC

    July 10, 2025
    Add A Comment
    Leave A Reply Cancel Reply

    CATEGORIES
    Archives
    • July 2025
    • June 2025
    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • December 2024
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024
    • December 2023
    • November 2023
    • October 2023
    • September 2023
    • August 2023
    • July 2023

    Blue Tech Wave (BTW.Media) is a future-facing tech media brand delivering sharp insights, trendspotting, and bold storytelling across digital, social, and video. We translate complexity into clarity—so you’re always ahead of the curve.

    BTW
    • About BTW
    • Contact Us
    • Join Our Team
    TERMS
    • Privacy Policy
    • Cookie Policy
    • Terms of Use
    Facebook X (Twitter) Instagram YouTube LinkedIn

    Type above and press Enter to search. Press Esc to cancel.