Catherine Yoshimoto
key takeaways
- The newly reconstituted Russell US Indexes take effect after US market close on 11 December 2026.
- Updated market capitalization data will reset the breakpoints between large-, mid- and small-cap stocks.
- The Russell US Growth and Value Indexes will not undergo a full December reconstitution; style probabilities will be updated only for additions and companies moving between the Russell 1000 and Russell 2000 Indexes.
December Russell reconstitution at a glance
The Russell US Indexes are approaching a milestone in their return to a semi-annual reconstitution schedule. On December 11, 2026, the indexes will undergo their second reconstitution of the year—and their first December reconstitution in more than three decades.
The move from annual to semi-annual reconstitution was designed to help the Russell US Indexes provide accurate market representation while remaining practical performance benchmarks. The change followed extensive data analysis—including a parallel run of the semi-annual reconstitution process—and market consultation on whether more frequent reconstitution could better capture evolving market dynamics.
As with the June reconstitution, the December review will reassess the Russell US Indexes’ size indexes based on updated market capitalization data, redefining the breakpoints between large-, mid- and small-cap stocks to reflect changes in the market.
One important difference between the June and December reconstitutions concerns the Russell US Style Indexes: the Russell US Growth and Value Indexes will not undergo a full reconstitution in December. Instead, style probabilities will be updated only for index additions and for companies moving between the Russell 1000® and Russell 2000® Indexes; companies remaining in the same parent index will retain their June 2026 style probabilities.
Key dates
The December reconstitution process begins with rank day on October 30, when eligible US securities are ranked by total market capitalization. That market snapshot will form the basis for the reconstitution.
November and December are transition months. Beginning on November 13, the preliminary lists are communicated to the marketplace, and updates are provided on November 20, November 27, and December 4. The newly reconstituted indexes take effect after US market close on December 11.
US small and large caps jostle for performance
The upcoming reconstitution provides a fresh opportunity for the Russell US Indexes to capture changes across the US equity market, including the frequently shifting market leadership between large- and small-cap stocks.
For example, in Q2 the small-cap Russell 2000 Index outperformed the large-cap Russell 1000 Index, extending a rotation into smaller companies. While Technology was an important contributor, gains were broad-based, with pharmaceutical and biotechnology companies, as well as banks, making substantial contributions.
However, the small-cap recovery was reversed in Q3 as large caps regained the lead: the Russell 1000 returned 1.8% during the third quarter, compared with a 7.2% decline for the Russell 2000.
Despite the reversal, small caps remained ahead over longer periods: as of September 30, the Russell 2000 had returned 13.7% year to date and 16.2% over 12 months, compared with 12.3% and 15.0%, respectively, for the Russell 1000.
US small caps lagged large caps in Q3, led over 12 months
Changing financial conditions
Changing financial conditions helped shape the recent shift towards the more positive relative performance of US large caps: rising bond yields and expectations of further Federal Reserve rate hikes favored larger companies, which have proved so far more resilient to tighter financing conditions.
Meanwhile, AI-related spending remained an important driver of large-cap performance, although market leadership extended beyond Technology. In Q3, Precious Metals and Mining was among the leading industries in both the Russell 1000 and Russell 2000.
Other notable contributors to gains included Oil, Gas and Coal and Software and Computer Services (in the large-cap Russell 1000 index) and Medical Equipment and Services (in the small-cap Russell 2000).
A rebound in small-cap IPOs
IPO activity across the Russell 1000 and Russell 2000 has continued to recover from the subdued levels seen in 2023 and 2024, although index inclusions remain well below the peaks seen in 2020 and 2021.
The recent rebound in IPO additions was most evident in the Russell 2000, where the 27 additions in the third quarter were the most since Q4 2021 (40). Russell 1000 IPO inclusions also increased to 5 in Q3, the same as in Q2 and also the most since late 2021.
Broadly, the structural decline in IPO inclusion activity over the last 4 to 5 years may reflect the recent trend of companies staying private for longer.
Russell US Indexes add eligible IPOs each quarter, in March, June, September and December. There is a separate, fast-track IPO inclusion process for companies that would make it into the Russell Top 500 index (i.e., the largest 500 companies from the Russell 3000). These companies are added to the index after the close of trading on the fifth day following the initial listing.
Initial public offering activity in US large-cap and small-cap indexes
The Russell 9000 Global will undergo its first reconstitution in December
December 2026 also marks the first reconstitution for the Russell 9000 Global index, which provides seamless alignment with the Russell US Indexes, including modular construction, broad coverage, a transparent methodology and a parallel reconstitution schedule.
The Russell 9000 Global Index unifies three core segments: the United States, developed world ex-US and emerging markets. Mirroring the construction approach of the Russell US Indexes, each core segment includes approximately 3000 companies, divided into a large-cap index of 1000 stocks and a small-cap index of 2000 stocks.
For the latest Russell US Indexes reconstitution information, including upcoming announcements and supporting materials, visit the Russell US Indexes reconstitution page.”
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