ICE Futures U.S., a leading regulated U.S. futures exchange for global agricultural, equity index and currency markets, today announced the introduction of two new futures contracts based on Russell Investments’ industry-leading U.S. stock indexes. The Russell 1000(R) Growth and Russell 1000(R) Value Index futures contracts will begin trading on May 3, 2010.
The Russell 1000 Growth and Value indexes measure the performance of the large-capitalization growth and value segments of the U.S. equity universe. Index components include members of the benchmark Russell 1000(R) Index, which is comprised of the largest thousand companies by market capitalization and represents approximately 92% of the investable U.S. equity market. The Russell 1000 Index is one of the most widely used benchmarks by institutional asset managers in the U.S. equity market. Of the ten most-used U.S. equity benchmarks for institutional assets, nine are from Russell, and the Russell 1000 Value and Growth are the second and third most actively used, respectively.
Said Ray McKenzie, vice president of U.S. Futures Market Development and Product Sales at ICE Futures U.S., "We’re pleased to extend the range of Russell Index products we offer our customers. The addition of Russell’s large-cap value and growth style indexes to our portfolio of Russell 1000 and 2000 index futures, combined with one of the fastest, most reliable futures trading platforms and full range of market participants, will present significant new hedging and risk management and exposure opportunities."
"We’ve innovated for 25 years to develop our industry-leading benchmark products to serve the needs of the global investment community," said Ron Bundy, managing director for Russell Investments’ index business. "It’s particularly gratifying that the Russell 1000 Growth and Russell 1000 Value indexes account for more than $1 trillion in benchmarked assets. This overwhelming industry acceptance of our style methodology combined with the power of ICE’s cutting-edge technology and client focus bode very well for the success of these new futures contracts."
The Russell 1000 Value and Russell 1000 Growth Indexes are relied upon by institutions and funds that specialize in a specific style of investing. The Russell methodology allows companies with both growth and value characteristics to be included proportionally in a growth-style and value-style index. Because of Russell Investments’ leadership in developing style indexes that reflect relevant market segments, more than 97% of institutional U.S. style assets that use a benchmark are benchmarked to Russell products.
Introduced in 1984, the Russell 1000 and the small cap Russell 2000(R) were the first "float-adjusted" equity indexes. Most stock indexes are based on market-capitalization, in which the number of shares outstanding multiplied by its price determines a company’s weighting in index. Float-adjustment refines market capitalization weighting by counting shares available for purchase in public markets, rather than total shares outstanding. Because stocks with higher float and more liquidity are more heavily weighted, float-adjusted equity indexes more accurately reflect the investment opportunity in the market. Russell indexes are reconstituted annually at the end of June to ensure consistent, accurate representation of the investable equity marketplace.
Since September 2008, ICE has held exclusive rights to offer futures and options on futures based on Russell’s industry-leading U.S. equity indexes, including the Russell 1000 and Russell 2000 Indexes, as well as the related style indexes.
