Some $100 billion invested in replicating the Russell indexes underwent an annual "reconstitution" as Frank Russell Co. announced deletions and new entries of stocks in the Russell 3000 index.
The result: 450 companies moved into the Russell 3000 index, including 251 companies that were initial public offerings. The new entries replaced 324 companies that were deleted effective July 1. The other 126 companies were eliminated due to mergers or bankruptcies during the previous 12 months and, according to the Tacoma, Wash.-based Russell's policy, were not replaced until the reconstitution.
Russell reconstructs its indexes every year by ranking the largest U.S. companies in the public equity market by market capitalization as of the May 31 closing prices.
In the latest reconstruction, the IPOs represent 1.8% of the index's total market capitalization. The market cap of the median company in the Russell 3000 rose 13% to $639 million from $564 million.
In the large-cap market the Russell 1,000, (the 1,000 largest companies in terms of market value) 18 of the new entries were IPOs. The market cap of the 1,000 stocks ranges from General Electric Co.'s $198.3 billion to CCB Financial Corp.'s $1.107 billion. In the small-cap market, 233 new entries were IPOs, representing 10.8% of the market-value of the Russell 2000 index. The market-cap ranges from Keystone Financial Corp.'s $1.107 billion to Santa Cruz Operation's $171.7 million.