Every year on the last day of June the components for all the Russell Indexes are updated based on market cap. The highest profile index is the Russell 2000 which is considered a small cap benchmark. The Russell 2000 is determined by taking the 3000 largest companies in the US by market capitalization then lopping off the top 1000 companies by size.
The bottom 2/3rds of this list end up being the Russell 2000. There are several funds and investment products that base performance on the Russell 2000. With changes in the components of the index comes rebalancing by these funds.
This year, the first step in the process occurs this coming Friday the 13th when the preliminary additions and deletions from the Russell indexes will be publish in the afternoon. The following Friday there may be some small updates to the list of additions and deletions released by Russell Investments. Then on the 27th the final reconstitution list will be made public after the markets close. Finally the new membership lists for many of the Russell Indexes will be posted on June 30th.
once a year the indexes get a makeover that is referred to as the Russell Indexes Reconstitution which occurs over a few weeks in June each year. The changes to indexes between the annual reconstitution consist of eligible initial public offerings that are added on a quarterly basis.
The annual process runs over the course of a few weeks and actually started back on May 31. On the last day of May the market cap of each company is determined and these companies are ranked. The result is a list of the 3000 largest companies by market cap. The top 1000 will comprise the Russell 1000 and the Russell 2000 Index will be made up of the bottom 2/3rds of the stocks on the Russell 3000 list. The next step is a preliminary list with the additions and deletions from the index being indicated.