Dealing With Index Concentration is Essential

FTSE Russell is your essential index partner for a changing world with over $18trillion in assets under management benchmarked to our indices. Our indices, across asset classes and investment objectives, create new possibilities for the global investment community.

Our Global Investment Research team and leading market experts produce valuable research insights across asset classes. Our experts’ deep understanding and analysis of the markets empower market participants to make better-informed investment decisions.

Equity markets are constantly changing, buffeted by natural disasters, geopolitics, and scientific discoveries to name just a few influential factors. Over the past few months our research team has investigated the concentration risk and the changing nature of Betas in the US equity market, they have questioned long-held assumptions about the stability of industry and sector cyclicality and educated investors on ways of strengthening their portfolios in the current market conditions.

Here we showcase a selection of research papers and short articles that provide useful insights on the US equity market.
 

How we built a better US equity benchmark - 40 years of the Russell US Indexes

View the history and heritage of the Russell US Indexes since their inception in 1984 and see how they are fully reconstituted each June, reflecting the current state of the US equity market, including its size and style segments. Read more here.
 

Composition changes of the Russell Indexes over 40 years

Find out how the Russell Indexes have changed over the forty years leading up to their 40th anniversary and how they closely mirror changes in the underlying US economy, indicating that they are representative of the broader economy. Explore further.
 

US equity market betas – why they matter and how they are changing

Our review of the changes in Russell 1000 industry betas from structural and transitory effects, helps to remind investors that betas are dynamic and need monitoring to understand portfolio relative risks. Find out more.
 

When is an index too concentrated?

Explore stock market risks, from Nokia and Volkswagen to today’s tech giants, and how fund and index rules ensure diversification. Access the insights here.
 

Can equal weight solve our concentration crisis? Not so fast….

Discover why equal weighting is not the cure for market concentration and discover a multifactor approach for better diversification and performance. Read the paper here.
 

How and when do we cap indexes?

Learn how FTSE Russell caps indices to manage market concentration risks posed by tech giants, ensuring investor protection through diversified investment. Find out more.
 

Russell 2000® Index: The original benchmark for US small caps

Read our review of the long-term investment case for small companies and find out about the design and construction methodology of the Russell 2000 Index. Explore further.