Paul: Welcome to Index Ideas from FTSE Russell. I'm Paul Amery, your podcast host. In this podcast, we look into how FTSE Russell Indices are built and why. We explore index ideas that can help you address real-world investment challenges. As a reminder to listeners, you can't invest in an index and so the concepts that we explore in the podcast are not investment advice. Any reference to potential investment strategies is intended for informational and educational purposes only.
In this episode of the podcast, we revisit the Russell Equity indexes. I'm joined by Catherine Yoshimoto, who is Director of Product Management at FTSE Russell. Catherine is here to talk about an expansion of the Russell Indexes’ coverage of the world's equity markets. Catherine, welcome back to Index Ideas.
Catherine: Thank you very much for having me.
Paul: So Catherine, we're about to launch a global version of the Russell Indexes. Why are the Russell indexes going global?
Catherine: More than ever, market participants are looking globally for equity investment opportunities. Capital is allocated across regions, and benchmarks that consistently reflect the full opportunity set play an increasingly important role. FTSE Russell has designed a representative and investable global equity benchmark using the familiar, trusted Russell framework, with more than $12 trillion in assets benchmarked, building confidence through clarity, consistency and transparency.
Paul: What is the Russell 9000 Global Index?
Catherine: The Russell 9000 Global Index provides a broad, investable representation of global equities, bringing together the largest 9000 companies worldwide in a single unified benchmark.
Paul: Listeners are probably familiar with the Russell 1000 and 2000 indices of large-cap and small-cap US stocks, which together make up the Russell 3000. But what are the building blocks of the Russell 9000 global?
Catherine: The Russell 9000 global unifies three core segments: the United States, developed world ex-US and emerging markets. Each core segment includes approximately 3000 of the largest companies, divided into the 1000—large-cap—and 2000—small-cap—stocks. So this is going back to the Russell US index's construction methodology of taking the 3000 largest stocks in the US universe, but it's also being applied to the developed world ex-US and emerging universes. The index is built as one cohesive structure, applying the familiar construction rules of the Russell US indexes globally.
Paul: Catherine, why would somebody use the Russell 9000 global index rather than, for example, a combination of the Russell 3000 plus the FTSE Global All-Cap ex-US? Or, to give another example, the Russell 3000 plus the FTSE Developed ex-US plus FTSE Emerging?
Catherine: Russell 9000 global is built using a single, seamless methodology across regions, which helps avoids gaps, overlaps and boundary inconsistencies. By contrast, combining multiple indexes constructed under different methodologies can introduce unintended coverage issues, such as double-counting securities or missing parts of the investable universe.
Paul: And why have we arrived at this number of 9000 constituents?
Catherine: A 9000-company target captures the vast majority of global investable equity market capitalisation while maintaining liquidity, scalability, and practical investability. This breadth strikes a deliberate balance relative to peer global equity benchmarks, covering neither too many nor too few stocks in the global opportunity set. For example, the FTSE Global All Cap index, covering global large-, mid- and small cap-stocks, is a similar construction on paper, but actually includes more securities than the 9000. And other benchmarks out there may cover fewer for a similar global large-, mid-, small-cap construct.
Paul: And how do we decide for the purposes of the Russell 9000 which countries are developed or emerging?
Catherine: Classification of countries as developed or emerging is determined through a rules-based classification process that evaluates market accessibility, regulatory standards and overall investability using transparent, evidence-driven criteria. For example, South Korea is classified as a developed world market in line with FTSE Russell's overall equity country classification framework. That applies to both the FTSE GEIS series and the Russell Global Indexes series.
Paul: Thank you for explaining that. And how do we rank and weight the constituents in the Russell 9000 global?
Catherine: So similar with the Russell US indexes’ construction, companies are ranked by total market capitalisation from largest to smallest as of a rank date and index weights reflect float-adjusted market capitalisation, supporting investability while providing broad objective representation of the global equity market. The rebalancing schedule aligns with the existing Russell US indexes’ reconstitution schedule, so the reconstitution for Russell 9000 global will also occur on the fourth Friday of June and the second Friday of December.
Paul: And how do we determine a company's nationality for the purposes of the Russell 9000?
Catherine: Company nationality under Russell is assigned using Russell's proprietary nationality rules, which rely primarily on three home country indicators: headquarters location, place of incorporation and most liquid exchange. When necessary, additional assets- and revenues-based tests are applied to better reflect a company's primary country of risk.
By contrast, the FTSE Global Equity Index Series typically assigns company nationality primarily based on country of incorporation and single primary listing. This means that Russell’s and FTSE’s nationality determination may differ. For example, a US company in the Russell 3000 may actually be classified as a Canadian or Australian company in FTSE GEIS.
Paul: So you mentioned the possibility of multiple stock market listings in different countries. How does the Russell 9000 handle local listings as opposed to American Depositary Receipts, which are traded on US exchanges, but represent a listing somewhere abroad?
Catherine: To maximise investability ADRs or American Depositary Receipts are prioritised when they are more liquid than local listings, while ensuring each company is represented at its true market cap, avoiding double counting. The benefit of this is that Russell Global Indexes’ users will be able to use the most liquid line between the local listing and the ADR. For example, Russell's methodology also ensures inclusion of companies that do not have a liquid local listing, for example, firms that may only be investable through ADRs. So this is a current gap in the FTSE Global Equity Index series methodology that the Russell 9000 Global addresses.
Paul: Thank you for explaining that. And how does the Russell 9000 Global compare with other global equity benchmarks?
Catherine: Russell 9000 Global balances breadth and investability, offering clarity, consistency and usability at scale. Coverage is broadly in line with peer global equity benchmarks, while construction aligns with how asset managers allocate and manage global portfolios. Using these three core regions—US developed, ex-US and Emerging—and looking for 3000 of the largest opportunities in each of those three regions.
Paul: And Catherine, who would you say this index is for?
Catherine: From ETFs to model portfolios, especially for those who already use the Russell US indexes, the Russell 9000 global helps them move seamlessly into global markets and provides a consistent foundation for global equity investing, supporting benchmarking, asset allocation, and portfolio construction.
Paul: And where can investors go to learn more about the Russell 9000 Global?
Catherine: More information is available on FTSE Russell's website.
Paul: And Catherine, any message you'd like to leave with listeners as we reach the end of the podcast?
Catherine: Now applied globally, the Russell Global Indexes’ framework delivers stable size segmentation and resilient market breadth across cycles. The Russell 9000 Global brings together the United States, developed world ex-US and emerging markets in one unified structure. With seamless coverage, a single methodology and a modular design, the Russell 9000 global offers a clearer way to represent global equities.
Paul: Well, Catherine, thank you for coming back on Index Ideas. And that's it for this episode.
Paul: If you've enjoyed the conversation, then please follow us and give us a rating or review on your podcast app of choice. If you'd like to get in touch with the show, you can do so via the email address
[email protected]. But for now, from me, Paul Amery, goodbye.
