According to a press release, the Russell Global SMID
Index provides investors with an objective measure of the group of stocks that
rank toward the bottom of the large cap segment and the top of the small cap
segment. A subcomponent of the Russell Global Index, the Russell Global SMID
Index initially covers 3,981 of those securities with a market capitalization
range from about $370 million to $5.3 billion.
“Active managers looking to profit from
informational inefficiencies and behavioral biases tend to favor small to mid
capitalization companies,” said James Carpenter, senior research analyst
in Russell’s Investment Division, in the press release. “Investment
managers believe this space is attractive because many companies are well run
but are not yet recognized.”
Carpenter added that the new benchmarks serve as tools to
attribute manager performance and more clearly assess the opportunity set in
which these managers work.
Russell also launched a family of subcomponent benchmarks
that roll up into the Russell Global SMID such as the Russell Global SMID
Growth Index and Russell Global SMID Emerging Markets Index. The methodology
begins with the universe of stocks in the Russell Global Index, then each stock
is objectively ranked by market capitalization in descending order, and Russell
calculates each member’s cumulative weight by its official security market
capitalization size. Those that fall within the designated range are members of
For the U.S. market, Russell also offers the U.S. Russell
2500 Index as a similar option, the announcement said.