Russell/Nomura Total Market Index adds 140 new firms in annual reconstitution
FTSE Russell, the global index provider, and Nomura Securities Co., Ltd., today announced that 140 new stocks were added to the Russell/Nomura Total Market Index, which captures 98% of the float-adjusted market capitalization of the Japanese equity market, as part of the annual reconstitution process on November 21. The new membership list for the indexes was posted on the FTSE Russell website.
Slight increase in market capitalization reflects rise in Japan equity markets.
The number of constituents in the Russell/Nomura Total Market Index increased by 105 to 1,500. There were 140 additions to the Index and 35 companies were deleted. Total market capitalization of the Index increased by 0.9% to 334.8 trillion yen (as of October 14, 2016, float-adjusted).
Total constituents for the Russell/Nomura Large Cap Index, representing the top 85% of the Russell/Nomura Total Market Index based on float-adjusted market capitalization, included the same 350 companies as at 2015 reconstitution, while the number of stocks in the Russell/Nomura Small Cap Index, representing the bottom 15% of the Total Market Index based on float-adjusted market capitalization, increased to 1,150.
The Russell/Nomura Total Market Value Index had 173 additions and 65 deletions, while the Russell/Nomura Total Market Growth Index had 155 additions and 111 deletions. The capitalization turnover ratios for the Value and Growth Indexes are 14.7% and 13.2% respectively. Turnover ratio for the Value Index is slightly higher than last year, but within the five year average.
Sector shifts in the last year include a Value tilt for the Land Transportation, Transportation Equipment and Real Estate sectors while Electric Appliances, Pharmaceutical and Information and Communication sectors are now tilted toward Growth.
Russell/Nomura Prime Index adds 22 new companies
The Russell/Nomura Prime Index, which is a sub-index of the Russell/Nomura Total Market Index, was designed as a benchmark for passive management strategies for institutional investors. The Index includes the top 1,000 float-adjusted stocks from the Russell/Nomura Total Market Index, representing all market cap segments. As of 2016 reconstitution, 22 companies, including one IPO, entered the Index for the first time.
The turnover ratio for the Index, at 1.1%, was 0.5% lower than last year. Among the 22 additions overall, lead sectors included Services (5 stocks), Chemicals & Electric Appliances (3 stocks each) and Information & Communication (2 stocks).
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About Russell/Nomura Japan Equity Indexes:
In 1995, Russell Indexes and Nomura Securities Co., Ltd. jointly developed Russell/Nomura Japan Equity Indexes that serve to measure performance based on various investment policies. The indexes are value weighted and include only common stocks domiciled in Japan. All indexes are subsets of the Russell/Nomura Total Market Index, which represents approximately 98% of the investable Japan equity market.
The Indexes are reconstituted annually on the first business day of December, in order to accurately reflect changes in the Japanese marketplace. The membership list is determined based on the float-adjusted market capitalization as of October 15 (last business day is selected if October 15 is a holiday).
Securities that leave the Russell/Nomura Japan Equity Indexes between reconstitution dates due to mergers, acquisitions or other similar corporate activity are not replaced. Thus, the number of securities in the indexes over the year fluctuates according to corporate activity. The only additions between reconstitution dates are as a result of spin-offs and initial public offerings falling in the large segment (as determined by the latest reconstitution).
Nomura is an Asia-based financial services group with an integrated global network spanning over 30 countries. By connecting markets East & West, Nomura services the needs of individuals, institutions, corporates and governments through its three business divisions: Retail, Asset Management, and Wholesale (Global Markets and Investment Banking). Founded in 1925, the firm is built on a tradition of disciplined entrepreneurship, serving clients with creative solutions and considered thought leadership. For further information about Nomura, visit www.nomura.com.
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