On Russell Rebalance, Nasdaq Closing Cross Notches Another Record

FTSE Russell is one of the largest providers of indexes for use by index fund and exchange traded fund issuers, and as such, its annual reconstitution is one of the most widely followed market events by traders and fund issuers alike.

Last week, FTSE Russell’s annual reconstitution occurred, and in a testament to the technology prowess offered by Nasdaq, the event went off without a hitch as the Nasdaq Closing Cross eclipsed yet another record on FTSE Russell rebalancing day, marking the 19th straight year that has happened.

“A record 3,314,650,992 shares representing $63.8 billion were executed in the Closing Cross in 2.04 seconds across Nasdaq-listed securities. This compares with 2,370,203,915 shares representing $80.9 billion executed in 1.97 seconds across Nasdaq-listed securities during Russell’s 33rd annual reconstitution in 2021,” according to Nasdaq data.

The Nasdaq Closing Cross is relevant because it ties together pricing for stocks listed across multiple major domestic equity courses.

“The Closing Cross brings together the buy and sell interest for Nasdaq, NYSE and NYSE MKT stocks, and executes all shares for each stock at a single price, one that reflects the true supply and demand for these securities. All nationally listed securities are eligible for the Nasdaq Closing Cross,” added Nasdaq.

As for Russell rebalancing day, it’s an important event unto itself because even when simply focusing on Russell’s domestic equity indexes, hundreds of index funds and ETFs track those gauges, and the dollar amount allocated to those benchmarks is staggering.

“All Russell US Indexes are subsets of the Russell 3000® Index, which represents approximately 98% of the US equity market. Russell US Indexes allow investors to track current and historical market performance by specific market segment (large cap/small cap) or investment style (growth/value/defensive/dynamic). Today, approximately $12 trillion in assets are benchmarked to or invested in products based on the Russell US Indexes,” noted Nasdaq.

Some of the world’s largest ETFs track FTSE Russell indexes. The provider’s well-known benchmarks include the Russell 1000, the Russell 1000 Growth and Value indexes, and the Russell 2000, which is one of the most observed small-cap gauges.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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