The annual reconstruction of Russells indexes started last May 29 when Russell took a market snapshot for stock price and share data at the markets close.
A preliminary list of the additions and deletions to Russell indexes will be published after the market close June 12, and updates to the list will be made June 19 and 26.
Unprecedented market volatility will probably result in significant movement of financial stocks between style indexes, said Stephen Wood, a senior portfolio analyst with Russell.
Because Russell had yet to take its market snapshot, however, he was leery of talking about specifics.
Russell allocates stocks that have both value and growth characteristics to its indexes on a percentage basis, depending on how strong those characteristics are. As a result, some stocks can appear in both value and growth indexes an approach that differs from that of Standard & Poors of New York.
When putting together its style indexes, S&P draws a much harder line that divides stocks into value and growth.
Also, S&P re-balances its domestic style indexes at the end of December and its global indexes at the end of September.
It is partly because of when S&P re-balances its style indexes that its financial stocks didnt move from value to growth. Because of when Russell re-balances its indexes, it will capture this years rally in financials.
The most dramatic changes to Russells style indexes are expected to center on financials, but other sectors are also expected to witness significant change.
Energy and health care are set to slim down in the small-cap Russell 2000 Growth Index, while consumer staples, financials and information technology should bulk up, according to a report from Merrill Lynch & Co. Inc. of New York at the end of April.
In the Russell 2000 Value [Index], we project utilities and consumer staples will see weight declines, versus rises for energy and industrials, the report said.
The health care sector should become a larger portion of the large-cap Russell 1000 Growth Index, and industrials are set to shrink, according to the report.