Megacaps land in both growth and value after Russell reconstitution

FTSE Russell reverted to a semi-annual reconstitution schedule in June and shifted portions of Amazon, Apple and Microsoft into the Russell 1000 Value Index. The changes took effect after the market close on June 26, 2026, and the reconstituted indexes were reflected in market listings at the open on June 29. Nasdaq trading volumes were heavy during the reconstitution window.

FTSE Russell said the switch ends the single-annual cadence it had followed since 1989 and is intended to keep index weights aligned with market fundamentals. Fiona Bassett, CEO of FTSE Russell, described the reconstitution as a cornerstone event for U.S. equity indexes and pointed to record notional volume traded during the process.

Russell assigns a stock’s market capitalization across growth and value style boxes using a multivariable model. The model uses measures such as book-to-price ratios, growth forecasts, sales projections, cash flow and share buybacks. When a company’s fundamentals shift toward stronger book-to-price or larger cash returns to shareholders, a larger share of its market cap can be allocated to the value index while the company remains significant in growth indexes.

Under the June reconstitution, portions of Amazon, Apple and Microsoft moved into the Russell 1000 Value Index. Because the Russell 1000 Value Index is cap-weighted, the three companies rose to top positions in the iShares Russell 1000 Value ETF (IWD) as of June 26, 2026. Apple and Microsoft also remain among the top holdings of the iShares Russell 1000 Growth ETF (IWF), creating overlap between the two funds.

Market participants have identified a new set of high-multiple, AI-focused companies that now concentrate pure-play growth exposure. The group labeled MANGOS-Meta, Anthropic, Nvidia, Google, OpenAI and SpaceX-has driven demand for growth-oriented assets by pushing valuations and revenue-growth expectations in that segment. Morgan Stanley portfolio manager Chris Morahan wrote that many market leaders no longer fall neatly into a single style box.

Large-cap passive funds that track Russell indexes can experience material weight changes overnight when the methodology reallocates market caps. The June reconstitution and the subsequent ETF holdings data illustrate how the index model and market fundamentals together alter the composition of both growth and value funds.