FTSE Russell Begins 37th Annual Russell US Indexes Reconstitution

Today, FTSE Russell, a leading global index provider, posted its preliminary lists of companies set to enter or leave the US broad market Russell 3000 Index and the Russell Microcap Index, marking the start of its 37th annual Russell US Indexes Reconstitution, before moving to a semi-annual reconstitution schedule beginning in 2026.

This year’s reconstitution changes will take place after US equity markets close on Friday, June 27. The lists of projected additions and deletions for the Russell US Indexes and other information regarding the reconstitution process is available on the FTSE Russell website.

In June, the Russell US index family is recalibrated to accurately reflect the current state of the US equity market. During this highly anticipated market event, the breakpoints between large, mid, small, and micro-cap are redefined to ensure market changes over the last year are captured. Companies are also re-evaluated to determine where they rank along the investment styles spectrum.

With approximately $10.6 trillion in investor assets benchmarked to or invested in products based on the Russell US Indexes, the Russell Reconstitution concludes with traditionally one of the highest trading volume days of the year on major US equity exchanges, reaching a record of nearly $220 billion traded across US exchanges at the close of 2024 reconstitution.

Fiona Bassett, CEO at FTSE Russell, said:

“The Russell indexes have continuously adapted to the evolving dynamic US economy, and it’s crucial to fully recalibrate the suite of Russell US Indexes, ensuring the indexes maintain an accurate representation of the market. The transition to a semi-annual reconstitution frequency from 2026 will ensure our indexes continue to represent the market and maintain the purpose of the index as a portfolio benchmark.”

Catherine Yoshimoto, Director of Product Management for the Russell US Indexes at FTSE Russell said:

“Against the backdrop of the Magnificent Seven companies’ continued increase in market cap, large cap growth equities continued to drive market performance over the one-year period ended April 30, 2025. Industrials and Health Care industries represent the highest number of companies graduating from the Russell 2000 Index to the Russell 1000 Index. In turn, new and growing Financials and Health Care companies replenish the Russell 2000 Index membership.”

US Total Market Size Lifted by the Rise of Large Cap Companies

Preliminary results for this year’s reconstitution reveal the US broad market increased in size, with the total market capitalization of the Russell 3000 Index up 10% from $53.0 trillion as of last year’s rebalance to $58.4 trillion based on this year’s rank day of April 30.

The market capitalization breakpoint, which separates companies in the US large cap Russell 1000 Index and companies in the US small cap Russell 2000 Index, held steady at approximately $4.6 billion.

The smallest company in the Russell 1000 Index by market capitalization was at $2.4 billion (with banding applied), while the smallest company in the Russell 2000 Index was at $119.4 million, a decrease of 20.6% from 2024. The +/-2.5% cumulative market cap percentile band between the Russell 1000 and Russell 2000 indexes widened in dollar terms, consistent with the widening size gap between the largest and smallest companies in the investable US equity market.

Largest 10 Companies Shuffle Positions as Apple Regains Top Spot

Apple retakes the largest company position from Microsoft in the Russell 3000 and Russell 1000 Indexes, a position it last held from 2021-2023. Apple was also the only company to exceed $3 trillion on this year’s rank day. Nvidia stayed in third place, while Amazon.com rose above Alphabet, which is the only top 10 company by size to see a decline in market cap. Meta stayed in sixth place, and Berkshire Hathaway stayed in seventh place. Tesla jumped to eighth place with the highest increase in market cap among the top 10, while Eli Lilly dropped from eighth to tenth place, despite a 15% increase in market cap.

The group of companies known as the “Magnificent Seven” (Microsoft, Apple, Nvidia, Alphabet, Amazon.com, Meta, Tesla) increased their combined total company market capitalization by 13.5% to $15 trillion from last year’s $13.2 trillion.

The largest seven companies each exceeded $1 trillion in total company market cap, with three of the companies above $2 trillion (including Apple above $3 trillion). The largest ten companies in 2025 broadened the gap between themselves and the rest of the of the index members, increasing their combined total market capitalization by 16.1% to $17.9 trillion from $15.4 trillion in 2024.

Additions Largely Represented by Health Care, Financials, Industrials and Consumer Discretionary Industries

Based on the preliminary results, by the conclusion of this year’s reconstitution, 36 companies will be added to the Russell 1000 Index, 19 of which are graduating from the Russell 2000 Index.

Seven of the new Russell 1000 members are classified as Industrials, six as Health Care and five each as Financials, Technology, Consumer Discretionary. The remaining companies being added to the Russell 1000 represent Basic Materials, Consumer Staples, Telecommunications and Utilities.

At this year’s reconstitution, two Health Care company IPOs are being added to the Russell 2000 Index. 242 companies are joining the Russell 2000 Index, with 25 moving down from the Russell 1000 Index and 133 moving up from the Russell Microcap Index. Russell 2000 Index additions are primarily represented by Financials, Health Care and Consumer Discretionary Industries.

Large Cap Styles: Growth Outperformed Value, Dynamic Outperformed Defensive

Large cap growth stocks outperformed value stocks as of the one-year period ended April 30, 2025, with the Russell 1000 Growth Index returning 14.5% compared to 8.6% for the Russell 1000 Value Index. However, in the first four months of 2025, large cap value stocks outperformed large cap growth stocks indicating a potential shift in market dynamics.

The Russell 1000 Style Indexes provide an objective measure of growth-oriented and value-oriented US large cap company performance by weighting index constituents based on their relative growth or value characteristics. Most companies are 100% growth or 100% value-oriented, but some contain a blend of both growth and value characteristics. Notably, the largest additions to the Russell 1000 Value Index in 2025 include Amazon.com, Alphabet and Meta, which are shifting from 100% Growth to partially Value.

The Russell US Stability Indexes provide a Third Dimension of Style, with the Russell Defensive Index measuring the more stable portion of the market based on sensitivity to economic, credit and market cycles, while the Russell Dynamic Index measures the less stable portion; they provide the basis for the Russell High Efficiency Defensive Index (HEDI) Series, which provides turnover-controlled capture of Low Volatility and Quality variables. Although the Russell 1000 Dynamic Index outperformed the Russell 1000 Defensive Index slightly over the one-year period, in the first four months of 2025, defensive stocks outperformed dynamic stocks.

Today’s posting of the preliminary lists of additions and deletions is the first public step in the 2025 reconstitution process for the Russell US Indexes. Updates to the lists will be posted to the FTSE Russell website after US market close on May 30, June 6, June 13 and June 20. If any changes to the publicly announced additions and deletions lists occur during the query period, which closes June 6, technical notices will be published on the FTSE Russell website. The 2025 Russell Reconstitution takes effect and the newly recalibrated indexes begin to operate after the US market close on Friday, June 27, from the open of US markets on Monday, June 30.

Although currently rebalanced on an annual basis, FTSE Russell announced in January that the reconstitution of the Russell US Indexes will be held semi-annually in June and November beginning in 2026. This decision is based on data analysis and follows a market consultation undertaken in response to the recent evolution of market dynamics. More on the Russell US Indexes moving to a semi-annual reconstitution next year can be found on the FTSE Russell website here.

To complete this year’s Russell US Indexes Reconstitution, FTSE Russell uses primary exchange closing prices from NYSE and Nasdaq. NYSE-listed stocks utilize NYSE’s auction mechanism while Nasdaq-listed stocks utilize Nasdaq’s “Closing Cross” mechanism to execute shares for each stock at a single price on June 27.

FTSE Russell is excited to celebrate the close of this year’s Russell Reconstitution with Nasdaq officials at the June 27 closing bell ceremony.