OREANDA-NEWS. The family of Russell/Nomura Indexes, which captures 98% of the float-adjusted market capitalization of the Japanese equity market, added 19 new firms as part of the annual reconstitution process on December 1, announced Nomura Securities Co., Ltd. and FTSE Russell indexes.

The number of Russell\Nomura constituents has decreased because of the rising stock prices

The total number of firms in the Russell/Nomura Total Market Index decreased by 91 to 1,400. While 135 firms were eliminated from the Index, there were 44 additions, 19 of which were included in the Index for the first time. The total capitalization of the Index slightly increased from 362.2 trillion yen to 364.6 trillion yen (as of October 15, 2015, float-adjusted).

The number of constituents in the Large Cap Index, which contains the top 85% of the Russell/Nomura Total Market Index based on market capitalization, got the same 350 stocks as in previous annual reconstitution. The number of stocks in the Small Cap Index, which represents the bottom 15% of the Total Market Index, decreased by 90 to 1,050.

The Total Value Index had 174 deletions and 80 additions, while the Total Growth Index had 152 deletions and 109 additions. The capitalization turnover ratios for the Value and Growth Indexes are 13.1% and 13.5% respectively . The ratios are higher than those of last year but lower than those of historical average since the calculation start period. In terms of sector concentration, “ELECTRIC APPLIANCES”, “MACHINERY” and “TRANSPORTATION EQUIPMENT” are now tilted toward Value while “LAND TRANSPORTATION”, “INFORMATION & COMMUNICATION” and “RETAIL TRADE” are tilted toward Growth.

Russell/Nomura Prime Index adds 24 new companies

The Russell/Nomura Prime Index, which is a sub-index of the Russell/Nomura Japan Equity Index, was designed as a benchmark for passive management strategies for institutional investors. The Index represents all Japanese equity markets and measures the performance of Japan’s top 1,000 float-adjusted stocks. As a result of this year’s reconstitution, 24 companies entered the Index for the first time. Its total market capitalization increased slightly from 354.2 trillion yen to 357.4 trillion yen (as of October 15, 2015, float-adjusted). The turnover ratio of the Index was low at 1.6%, following the same trend seen in the previous years. Among the 24 additions overall, 7 RETAIL TRADE sector stocks, 5 SERVICES sector stocks, and 4 REAL ESTATE sector stocks are newly added constituents.

About Russell/Nomura Japan Equity Indexes:

In 1995, Russell Indexes (now FTSE Russell indexes) and Nomura Securities Co., Ltd. jointly developed Russell/Nomura Japan Equity Indexes that serve to measure performance based on various investment policies. The indexes are value weighted and include only common stocks domiciled in Japan. All indexes are subsets of the Russell/Nomura Total Market Index, which represents approximately 98% of the investable Japan equity market. The Indexes are reconstituted annually on the first business day of December, in order to accurately reflect changes in the Japanese marketplace. The membership list is determined based on the float-adjusted market capitalization as of October 15 (last business day is selected if October 15 is a holiday). Securities that leave the Russell/Nomura indexes between reconstitution dates due to mergers, acquisitions or other similar corporate activity are not replaced. Thus, the number of securities in the indexes over the year fluctuates according to corporate activity. The only additions between reconstitution dates are as a result of spin-offs and initial public offerings falling in the large segment (as determined by the latest reconstitution).