Russell Global Index Shows The U.S., Israel And Taiwan Lead The List Of Additions Posted Today On Russell.com - Developing Countries Show More Additions Than Developed Countries

Russell Investments posted lists today of stocks set for addition to or removal from the Russell Global Index when it is fully reconstituted June 29. These lists offer an indication of how equity markets in 65 constituent countries fared during the past year's global recession since the index reflects the global market and some 10,000+ stocks ranked by market capitalization.

Looking at the Russell Global ex-U.S. Index, the countries with the greatest number of net additions set for inclusion are Israel (+57), Taiwan (+37), Republic of Korea (+25), Hong Kong (+20), India (+19), China (+ 19), Turkey (+17) and Malaysia (+12). The Russell Greater China Index comprises three of the top seven countries with a net increase of 76 stocks in the global index.

"The bottom line is that emerging market nations are becoming more developed," said Rob Balkema, portfolio analyst for Russell Investments. "A decade ago, countries like Korea, Israel, Taiwan and China were a far cry from how they operate today, and growth projections for the larger emerging nations like China are quite high for the next 25 years."

The lists of additions to the global index and separate lists for the U.S. broad market and U.S. micro-cap segment are posted at www.russell.com/indexes/membership/reconstitution/Reconstitution_changes.aspx.

The lists show the U.S. component of the Russell Global Index (Russell 3000® Index) leads all other countries with 276 additions. The U.S. market shows a net increase of 121 stocks resulting from this year's reconstitution.

Overall, the decreases in eligible securities appear more concentrated in developed economies. The countries in the Russell Global Index with the greatest number of net deletions are the United Kingdom (-59), Canada (-42), Australia (-41) and Japan (-38).

"Japan in particular is an export economy and as global growth has slowed dramatically over the past year and exports have decreased, such markets have become a smaller slice of the global pie," said Balkema.

The lists confirm five countries that previously were part of the global index either are ineligible for the index due to risk scores or they have no securities that qualify for membership this year. These countries are Pakistan (35 in 2008), Ukraine (16 in 2008), Vietnam (10 in 2008), Latvia (1 in 2008) and Slovak Republic (1 in 2008). Regarding those countries which previously had no stocks in the index, none of them appear on the additions this year.

"The problems with the banking systems in some Eastern European nations has caused many of the smaller countries to suffer precipitously," said Balkema. "Countries like Latvia or Slovakia simply don't have the capital and strong governing bodies to provide stability in the turbulence of the last 12 months."

Looking at index reconstitution data from the past decade reveals some distinct patterns. Several countries, such as China (27 in 1999, 309 in 2009), the Republic of Korea (123 in 1999, 327 in 2009), and Taiwan (252 in 1999, 397 in 2009) have seen considerable increases in the number of stocks in the Russell Global Index, which continued this past year. Others such as Australia (136 in 1999, 316 in 208, 258 in 2009) and Canada (275 in 1999, 476 in 2008, 404 in 2009) have also seen considerable growth in the number of inclusions over the past decade, though this year they experienced among the largest drops in the number of eligible stocks.

Russell reconstitutes its comprehensive family of global indexes annually at the end of June in order to assure they systematically and accurately reflect current market realities. For details on Russell's index reconstitution, go to www.russell.com/indexes/membership/reconstitution/default.asp.

Russell's innovative index design—including annual reconstitution, float-adjusted market capitalization, multi-factor style analysis, and objective and transparent rules—continues to grow in industry usage, and Russell benchmarks now account for 63.3% of institutional U.S. equity products. Altogether, Russell’s industry-leading indexes account for about $4 trillion in assets benchmarked.