SMID-Cap Strategy—Interesting Chart: Given Concentration in R2, Big Weight Loss

Research evidence excerpt

SMID-Cap Strategy—Interesting Chart: Given Concentration in R2, Big Weight Loss

USA | Equity Strategy EquityMayResearch24, 2026

STRATEGY NOTESMID-Cap Strategy—Interesting Chart: Given

Concentration in R2, Big Weight Loss

FTSE Russell announced preliminary changes to its benchmarks (see There will be 243 new names in the RUT after

rebalancing; 163 will leave the benchmark

Rebalancing Note), and given how concentrated even the Russell 2000 has Number of stocks Deletions Adds

become, we see chunky weight leaving the index. Investors will need to replace 400

these big weights with plenty of new ideas. Top 10 weigh in at ~8%, the highest 350300

250since '00; hence, deletes weigh in at 18% – 2nd highest in history ('03 was

higher). In all, 243 new names enter the index on June 26, and 163 will exit the 200150

benchmark. 100 2003 2006 2009 2012 2015 2018 2021 2024

.

Source: FactSet; FTSE Russell; Jefferies

An interesting chart—On Friday evening, we received the preliminary indexes from FTSE Russell,

Today, the Russell 2000 is most concentratedand this will be the largest trading day in the history of these indexes, as turnover accelerated due since Feb '00

to gyrations across the equity market. The event takes place at the close of trading on June 26. Weight of the Top 10 Names

9.0 Russell 2000

Given that the winners keep winning and getting larger and more impactful in the Russell 2000, 7.0

the Top 10 names carry quite a bit of clout. Maybe not to the same degree as the Mag 7 in the S&P 5.0

500 or Russell 1000, but the Top 10 names currently weigh in at 7.8% of the RUT– the highest level

since February '00, when they clocked in at 8.6%. 3.0

1.0

Since Russell instituted banding around the breakpoints in '03, the average weight of the deletes .