These annual changes impact a roster of ETFs built around Russell indices, which then must buy or sell underlying stocks in order to track their benchmarks. The whole reconstitution process takes place throughout the month of June in an annual event that’s rolled out in three parts.
Today there is more than $110 billion in U.S.-listed ETF assets linked to four U.S. equity Russell indices, the bulk of the assets being dominated by one issuer: iShares.
Among the biggest Russell-linked ETFs, all offered by iShares—are funds such as the $7.7 billion iShares Russell 3000 ETF (IWV), the $39 billion iShares Russell 2000 ETF (IWM), the $18.5 billion iShares Russell 1000 ETF (IWB) and the $36.2 billion iShares Russell 1000 Growth ETF (IWF).
Other ETFs impacted by the reconstitution include:
- Russell 3000: Beyond IWV, there’s also the SPDR Russell 3000 ETF (THRK), with $417 million in assets, and the Vanguard Russell 3000 ETF (VTHR), with $342 million. In all, there is about $8.46 billion in ETF assets tied to the Russell 3000 Index.
- Russell 2000: There are 13 ETFs on the market today linked to the Russell 2000 Index, with combined assets exceeding $42 billion benchmarked to the index. Still, the space is overwhelmingly populated by leverage and inverse strategies—10 of 13 Russell 2000 ETFs fit that bill. Only three ETFs offer vanilla exposure to the benchmark, the biggest being IWM, followed by the Vanguard Russell 2000 ETF (VTWO) with $1 billion, and the SPDR Russell 2000 ETF (TWOK), with $224 million.
- Russell 1000: Beyond IWB, there are three other Russell 1000 strategies in the market, one of which is a $1.8 million-in-assets leveraged fund. They include the $704 million Vanguard Russell 1000 ETF (VONE), and the $148 million SPDR Russell 1000 (ONEK). In all, there is about $19.4 billion in ETF assets tied to the Russell 1000 Index.
- Russell 1000 Growth: Beyond IWF, there is the $1.2 billion Vanguard Russell 1000 Growth ETF (VONG), and two leveraged ETNs by Credit Suisse and UBS that together command $2.3 billion in total assets. There is almost $40 billion in ETF assets tied to this index.
For a full list of company additions and deletions, check out Russell’s full reconstitution report.
Contact Cinthia Murphy at [email protected]