The Last Annual Russell Reconstitution Has Finally Happened — Here’s What Changed

First, the Nasdaq 100. Then, the S&P 500. And now, the Russell 1000 might be eyeing its own all-time high.

Could the Russell 2000 be next?

After a 22.7% rebound in the R2K since its Apr. 8 lows, anything is possible — and maybe even more now that the Russell Reconstitution has come to pass.

So, what’s inside the final yearly shakeup in the Russell Universe?

Russell recon: The $220B+ reshuffle, which is often one of the highest-volume days of the year, means a reordering of the ranks of more than $8.5T in assets benchmarked to the Russell’s various indexes. Per Russell, there are 228 new additions to the Russell 3000 index (which includes the Russell 1000 and 2000). And this year, the changes speak volumes about the diverging trajectories of the two indices.

• For a fifth straight year, it became easier for small-caps to join the Russell 2000, with the market cap of the index’s smallest firm falling from $150.4M to $119.4M — a 20.6% decline.
• Meanwhile, the breakpoint between the large-cap-oriented Russell 1000 and small-cap Russell 2000 stayed at $4.6B for the second year in a row.

The Nitty-Gritty Details

The barrier to entry for the R2K and R1K says a lot about the state of the markets — and the performance gap between the two. While the Russell 1000 is up 13.1% over the past year, the Russell 2000 has climbed just 6.6%, a sign that smaller firms are still struggling. The specifics reveal even more chaos.

• Per LSEG, 37 companies were added to the Russell 1000 — 19 promoted from the Russell 2000, 17 as new additions to the Russell index universe (typically meeting eligibility criteria).
• In contrast, the Russell 2000 is welcoming 236 additions — 25 demoted from the R1K, 129 promoted from the Russell microcaps, and 82 entirely new to the index family.

The upshot: It remains to be seen if the shuffle in the indexes will help them keep pace with the red-hot Nasdaq 100 and S&P 500, especially with the R2K far behind the pack and in need of a big break.

Let’s do this again (soon): Going forward, the Russell Reconstitution will become a more common staple of our investor diet as Russell FTSE moves from an annual cadence to twice a year. We’ll see you back here, this time next year… and then again in Q4 2026 for the semi-annual affair.