Global Market Strategist
Investment Specialist, U.S. Equity
On June 26th, the FTSE Russell indices will undergo their now semi-annual reconstitution, in which companies are added, removed or re-weighted across market cap and style indices. While a mechanical event, it results in one of the largest-volume trading days of the year, impacting $6 trillion of active and passive AUM benchmarked to the major Russell indices. This time, it may have more meaningful implications given double the typical turnover, and shifts in some of the most concentrated positions.
How exactly does this reconstitution work?
Starting with size, eligible stocks are ranked by market cap. Thereafter, a style score that governs their representation in value and growth is determined by three inputs: book-to-price, 2-year forward earnings growth and 5-year historical sales growth.
Concentration risk amplifies overlap risk.
One unique feature of how the style indices are constructed is that they are not mutually exclusive. Only 25-30% of stocks are exclusively growth or value, while the rest are split across both styles. Additionally, each security’s value and growth weightings sum to 100%. This exacerbates concentration risk, and more specifically, overlap risk. For instance, the top 10 companies in the Russell 1000 account for 36% of the index but those same companies will represent an estimated1 19% of the Russell 1000 Value and 54% of the Russell 1000 Growth, with four companies in both styles.
Most major sector changes will be driven by single stocks. Amazon will become the largest weight (6.1%) in the Russell 1000 Value. Additionally, Apple and Microsoft will be added to Value, with their weights shrinking in Growth. Meanwhile, Alphabet exits Value entirely. These changes result in the Mag 7 weight in Value increasing from an estimated 6.6% to 16.3%, and the weight in Growth dropping from 51.4% to 44.3%. Yet, that doesn’t mean value will be more concentrated, nor will growth be more diversified. Given the parabolic rise in semiconductors YTD, semis will become 34% of Growth as Micron exits Value completely, joined by Sandisk and Western Digital, and technology will represent 71% of Growth.
SpaceX launches into the Russell-sphere.
SpaceX will also be added to the Russell indices, not only in Growth but also with a sliver in Value despite not being profitable. It will have a style weighting of roughly 90% growth/10% value, which translates to a 0.26% weight in the Russell 1000 Growth and 0.03% weight in the Russell 1000 Value. These small weights stand to grow as the shares available for public trading rise.
Investment implications:
For investors, it’s not about the temporary, technical dislocation to markets, but rather the underlying exposures in portfolios, particularly those with passive strategies. That’s why active management can add a layer of risk management, investing in companies for their favorable long-term fundamentals rather than their current benchmark prominence.
1 All weights quoted are estimates based on market data as of June 18, 2026.
By Meera Pandit & Jaime Steinhardt - June 26, 2026