Russell indexes will add initial public offerings on a quarterly basis, beginning Sept. 30, when an estimated 40 IPOs will be added. On Sept. 15, Russell will announce the IPOs that qualify.
Russell will rank all recent IPOs as of Aug. 31 relative to market-capitalization breaks of the indexes, adjusted for performance from the June reconstitution. The smallest of the Russell 1000 stocks had a market cap of $1.6 billion, and smallest of the Russell 2000, $175 million, said Lori Richards, senior product manager, Russell indexes. Russell will not delete existing index members to make room for the IPOs, waiting until the annual reconstitution to make such changes. Russell's methodology for IPO additions will be stated on its website at www.russell.com.
Adding IPOs in a more timely way will "enhance how well each index reflects its segment of the U.S. equity market," according to a Russell Investment Group statement.
Google Inc., with a market cap of almost $27.8 billion as of Aug. 31, could be the most prominent inclusion in the large-cap Russell 1000. Ms. Richards said nothing in Russell's criteria would preclude Google from inclusion, but she declined to confirm any company addition.
