What the June Russell reconstitution changed in the large cap value and large cap growth indices
The Russell index reconstitution took effect at the end of June, resulting in several large-cap stocks moving between the Russell 1000 Value and Russell 1000 Growth indices, and the changes are more significant than the sector-level view suggests. Let’s examine what changed and what it means for investors allocated to strategies benchmarked to these indices.
The key moves in June
Between late May and the end of June, the largest shifts came from a handful of mega-cap stocks:
Alphabet (Google) left the Russell 1000 Value Index entirely (previously approximately 4.2% weight), while its weight in the Russell 1000 Growth Index increased from approximately 7% to over 11%.
Amazon moved in the opposite direction, becoming the largest holding in the Russell 1000 Value Index at 5.9% while falling to a token 0.6% in the Russell 1000 Growth Index.
Apple and Microsoft entered the Russell 1000 Value Index as new constituents, with combined weights above 9% (about 5.4% and 3.9%, respectively), while their Russell 1000 Growth weights were reduced by roughly half.
Micron migrated from the Russell 1000 Value Index to the Russell 1000 Growth Index, entering at a new 3.9% weight.
The effects of the reconstitution are clearest at the individual stock and sub-industry levels. In the Russell 1000 Value Index, exposure to search and semiconductors declined while exposure to devices, consumer internet, and enterprise software increased. The Russell 1000 Growth Index saw the mirror image, with its exposure to the semiconductor supply chain increasing.
Why can a stock appear in both indices?
Russell does not assign each stock exclusively to the Russell 1000 Value or Russell 1000 Growth Index. It scores every company on a value-to-growth spectrum, using price-to-book for value and earnings and sales growth for growth, and can split a company’s market capitalization between the two indices in proportion to that score. When the scores are recalculated at reconstitution, a company with an ambiguous style profile can shift substantially from one index to the other. Alphabet and Amazon are clear examples of this dynamic.
Implications by mandate
Active large cap value: The Russell 1000 Value Index now includes Apple, Microsoft, and Amazon among its largest positions, names that a traditional “value” approach may not hold at current valuations. Managers who maintain their style discipline may carry larger active underweights relative to the benchmark. Active share tends to rise in this scenario, though from an already-elevated base, since these managers generally did not hold the incoming names.
Active large cap growth: The Russell 1000 Growth Index has long been top-heavy, but its shape shifted: the Magnificent Seven’s (Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta, and Tesla) combined weight fell from approximately 53% to 43%, even as weight concentrated further into the very largest names, Alphabet and NVIDIA in particular. A notable effect is that active share may rise more for growth than for value, not because growth managers hold different names, but because the reconstitution reweighted the shared megacaps that previously drove overlap between manager portfolios and the index. When the largest common positions shift by several percentage points, the gap between a manager and the benchmark can widen even without any change to the portfolio.
Passive large cap: The shifts described above become the new exposure directly. A Russell 1000 Value index fund now allocates more to mega-cap technology, while a Russell 1000 Growth index fund holds more hardware-weighted positions in the AI and semiconductor complex, with roughly 70% of the index in technology and communication. In each case, the investor adopts the revised composition automatically at the rebalance.
Looking Ahead
Beginning with the 2026 cycle, FTSE Russell has moved Russell US Indexes from annual to semi-annual reconstitution, with the primary rebalance continuing in June and a second taking effect in December. Constituents and weights can now shift twice a year rather than once.
Takeaway
A benchmark is not static. When a small number of large companies change style classification, the composition of an entire index can shift, along with the exposures of the managers and investors measured against it. Reviewing benchmark composition after each reconstitution helps ensure that portfolios and expectations remain aligned with what the index actually holds.