The tie-up will result in greater US penetration for FTSE's global indexes, and greater European penetration for Russell's US indexes.
The collaboration includes the following four main areas of focus:
Russell will adopt the FTSE Global Classification System for its US Equity Indexes, including the Russell 3000 Index; the Russell 1000 Index and the Russell 2000 Index by 31 December 2000
FTSE will provide real time calculations of the Russell Indexes, effective from 1 July 2001
Russell and FTSE will jointly market and distribute the other's index products
FTSE and Russell will seek to align the rules governing both sets of indexes so that, where practicable, any significant differences will be removed.
According to Mark Makepeace, FTSE Managing Director, the collaboration with Russell will allow FTSE to step up its already rapid expansion into the US market.
He said: "This collaboration is clear evidence of the great strides FTSE is now taking in the world's key financial markets and reflects the increasingly global nature of our business.
"This alliance not only provides US investors with easier access to the leading FTSE benchmarks such as the FTSE All-World Index but provides further evidence of the increasing recognition and adoption of the FTSE Classification System as the leading global industry standard.
Craig Ueland, Chief Operating Officer at Frank Russell Company said: "This is great news for the global investment community because it provides a comprehensive suite of benchmarks that will reflect market reality for virtually any portfolio.
"For years Russell has evaluated outside investment managers and in doing so created a successful standard for objective indexes in the United States. By aligning our methodologies and combining forces with FTSE, we will be able to deliver this standard globally."
Steven Schoenfeld, Head of International Equity Strategy at Barclays Global Investors said: "Collaboration between FTSE and Frank Russell on production, industry classification and marketing will substantially benefit plan sponsors by increasing the industry's market focus on broad-based investable indexes that appropriately reflect the market opportunity set.
"Increased transparency of construction and implementation rules, combined with longer-term harmonization of methodology, will further benefit asset owners and managers.
