According to a press release about the reconstitution, about one-third of the additions are in the financial services and health care sector, with 57 companies and 48 companies, respectively. Australia and the UK together are the origin of most new companies in the index (202 of the additions), followed by Hong Kong (92), Canada (90) and India (66).
Slight changes are expected in terms of sector weighting within the index, with the energy services sector likely seeing an increase from 3.9% at this point last year to 4.6%, while the health care sector (despite the number of additions) likely will decline in weighting from 12.1% to 11.9%. Financial services (22.4%) and consumer discretionary (13.4%) will remain the largest sectors.
Ninety-two initial public offerings (IPOs) have joined the Russell 3000 since the last reconstitution of the index and an additional 36 IPOs that came to market during the second quarter will be added this month as part of the reconstitution process.
“Turnover in more specific capitalization segments, such as the small-cap Russell 2000 Index, is expected to be lower this year as well given the low market volatility between large and small cap stocks,” said Lori Richards, client service director for Russell indexes, in the press release. “This is also due, in large part, to our rules-based methodology that adds IPOs on a quarterly basis and several other recent enhancements such as percentile banding.”
The Russell 3000 has increased more than $3 trillion from $15.3 trillion at this point last year to $18.5 trillion.
The preliminary additions to the Russell 3000 index can be found here.
The preliminary deletions from the Russell 3000 index can be found here.