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The Story Behind 2023 Russell Recon Style Shifts

Jun. 15, 2023 2:45 AM ETGOOG, GOOGL, META, IWM, IWB, IWF, IWD, IWN, IWO
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Summary

  • The Russell annual reconstitution process reflects evolving market dynamics, resulting in shifts in style classifications for constituent companies and industries.
  • The methodology behind it ensures that the Russell Indexes continue to accurately reflect the evolving market landscape.
  • Style valuations have changed for two tech giants since the last reconstitution - Alphabet (Google) and Meta (Facebook) - moving them to pure growth.
  • Their relatively high past sales growth and medium-term growth forecast are principally responsible for this move. They therefore represent the Russell 1000 Value Index's largest deletions by both size and weight.
  • Energy industry undergoes style change: The Energy industry is experiencing a notable shift toward small cap value.

Strategy of diversified investment.

tadamichi

By Catherine Yoshimoto, director, product management

Of the many stories that emerge from our annual Russell Reconstitution, constituent shifts between our growth and value indexes often garner the most headlines. Last year, Meta’s (META) shift

Russell style methodology variables

Potential industry style shift for large caps

Largest Russell 1000 valuations by weight

Potential industry style shift for large caps

Preliminary Russell reconstitution industry weights

This article was written by

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