To listen to the FTSE Russell Index Ideas episode with Catherine Yoshimoto
An index like the Russell 3000, the FTSE All-Share or the FTSE Global All Cap enables us to view the stock market..
But sometimes we want to segment the equity market into building blocks, using attributes like company size or style.
In fact, viewing the US stock market through a style lens has long been a popular approach among asset managers.
The Russell Style Indexes (growth and value) were introduced in 1987, three years after the launch of the Russell 1000, 2000 and 3000.
The Style Indexes helped meet the need of active asset managers who preferred to measure their performance of particular cohorts of US equities.
FTSE Russell added a third dimension of style—dynamic versus defensive stocks—to the index range in 2011.
But how do we define “growth” and “value”, or “dynamic” and “defensive”? Is there a hard dividing line between the two categories or are they less rigid? How do we build an index once we’ve worked out the style scores?
In the November 2025 episode of FTSE Russell Index Ideas podcast, Catherine Yoshimoto, director of product management at FTSE Russell, answers these questions and more.
In the podcast, she explains the construction principles behind the Russell Style Indexes, which are the most widely used type of benchmark in the whole Russell US Indexes family.
The Russell Style indexes have approximately $7.5trn benchmarked, including both active and passive assets, relative to the total for the entire Russell US Indexes, which is almost $12trn. So it's almost two-thirds of the entire Russell assets benchmarked,
Catherine Yoshimoto
She goes on to explain how FTSE Russell defines the growth and value styles for use in the Russell Style indexes.
“The book-to-price ratio is used for the value portion, and there is a scoring process that combines this value metric with the two-growth metrics—the forecast medium term [earnings] growth and historical five-year sales-per-share growth,” she says.
“So it's a combination of three highly representative variables, one value and two-growth, that is combined to create a composite value score. That translates into how the overall index market cap is divided between the growth and value indexes.”
There is no sharp division between the two equity styles, however, Yoshimoto says, taking the Russell 1000 index of US large-cap stocks as an example.
“There are about 30% [of stocks] in the middle that are in both the growth and value indexes,” she says.
For these companies, FTSE Russell apportions part of the market capitalisation to each style index.
“There's no double-counting, in the sense that the shares and market cap roll up into the Russell 1000,” Yoshimoto says.
“But some companies in the middle that aren't distinctly growth or value are in both indexes.”
Russell Style Indexes methodology
What about the magnificent seven (Mag 7) stocks that have dominated US equity market performance for the last few years? Surely they all fall into the growth category?
“They were until this year's Russell Indexes reconstitution (in June 2025),” Yoshimoto explains during the podcast.
“But because of their movement in book-to-price relative to the rest of the index, or in one of the other growth metrics for one of the companies, three of the Mag 7 companies—Alphabet, Amazon and Meta—are now partially growth and value,” she says.
In the podcast, Yoshimoto goes on to explain how FTSE Russell has introduced new, capped versions of the Russell Style Indexes to address the challenge of increasing index concentration in a few large companies.
She explains how and when the Russell Style Indexes are kept up to date and what will happen when the Russell US Indexes add a second semi-annual reconstitution date in 2026.
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