June 25, 2012
Investments released its newly reconstituted Global Indexes following its annual
index reconstitution late last week, benchmarking about $3.9 trillion in assets.
Global market capitalization showed a notable decline, sliding to $44.2
trillion on May 31, from $52.2 trillion the same period a year ago, while U.S. large-cap stocks, led by the tech sector, had a strong
performance in the Russell 3000, slipping to $15.8 trillion from $16.7 trillion
during this same period.
strong performance of the global markets in the first quarter of 2012, led by
large-cap stocks in the U.S., showed in the all-time high of the Russell 1000
Index on April 2,” said Stephen Wood, chief market strategist for North America
at Russell Investments. “However, international turmoil over the last few
months has contributed to a decline in the global equity market and a resulting
drop in market capitalization of the Russell global index family, as shown
during the annual rebalancing process.”
dropped from first to second position among U.S. stocks in the Russell 1000
Index at reconstitution, exhibiting a significant shift from growth to
value. Overall, the Russell U.S. indexes reflect a market shift over the
past year to higher returns in growth stocks. Apple Inc. took position as
the largest stock in the Russell 1000 ($540.2 billion), with a 68%
capitalization increase since May 31, 2011.
17.1%, technology became the largest sector in the Russell 1000 Index at
rebalance, overtaking financial services at 16.7%. This was in part because
of the inclusion of Facebook—the largest addition to the Russell indexes globally—to the technology
sector of the Russell 1000 Index.
also led U.S. small caps in the biggest increase year-over-year, as 37 technology
companies joined the Russell 2000 Index. Financial services continues to
be the largest sector in this index, even though 17 financial services stocks
graduated to the U.S. large-cap Russell 1000.
China and Hong Kong showed the largest percentage increase in country weight
within the Russell Global Index since last year’s reconstitution. China remains
the world’s third-largest country in total market capitalization, behind the
U.S. and Japan. And emerging markets declined materially against developed
markets over the past year, decreasing their Russell Global Index weighting,
from 14.7%, to 13.7%.