Russell 3000 Growth Index

The Russell 3000 Growth Index measures the performance of the growth-oriented segment of the U.S. equity market, drawing its constituents from the full Russell 3000 Index. Every company in the Russell 3000 is scored and split into growth or value categories using two factors: the price-to-book ratio and a composite of long-term growth forecasts. Companies with higher price-to-book ratios and stronger earnings growth expectations land in the growth index. Those with lower ratios and weaker growth expectations go into the Russell 3000 Value Index.

Some companies fall in the middle. FTSE Russell uses a non-linear probability algorithm to assign partial weights to borderline companies across both indexes, so a single stock can appear in both the growth and value indexes simultaneously at different weights.

What the Index Contains

The Russell 3000 Growth Index holds technology, consumer discretionary, healthcare, and communication services companies at the largest weights, reflecting where growth expectations and high price-to-book ratios concentrate in U.S. equity markets. Mega-cap technology companies account for a substantial share of the index's total market capitalization because both their elevated P/B ratios and consensus growth forecasts place them firmly in growth territory.

The index is market-capitalization weighted. Larger companies carry greater influence on index returns. A 10% move in the largest constituent moves the whole index more than a 10% move in a company ranked 500th.

Reconstitution and Quarterly Capping

The Russell 3000 Growth Index reconstitutes annually in June alongside the full Russell U.S. Index family. FTSE Russell ranks all 3,000 Russell 3000 constituents by their composite growth score on rank day and redraws the growth/value boundaries accordingly. Companies that scored on the boundary last year may shift entirely into one category or have their cross-index weights adjusted.

Effective March 24, 2025, FTSE Russell introduced a quarterly capping methodology for the standard Russell U.S. Style Indexes, including the Russell 3000 Growth Index. The capping applies four times a year to prevent any single security from dominating index performance beyond defined concentration limits. The uncapped versions of the index are published separately under the "Benchmark" name.

How It Differs From the S&P 500 Growth Index

Both indexes attempt to capture U.S. growth stocks, but they use different methodologies and cover different universes. The Russell 3000 Growth Index spans all three capitalization tiers: large, mid, and small. The S&P 500 Growth Index covers only large-cap companies within the S&P 500. For investors wanting small- and mid-cap growth exposure alongside large-cap names, the Russell 3000 Growth Index provides a broader canvas.

Who Uses This Index

Growth-oriented mutual funds and ETFs benchmark against the Russell 3000 Growth Index to measure whether their stock selection adds value over the passive alternative. Factor-based investors use it as the reference against which to evaluate growth factor premiums over time. Institutional allocators compare their growth equity manager's results against this index to assess performance attribution.

Sources

• https://www.lseg.com/content/dam/ftse-russell/en_us/documents/ground-rules/russell-us-indexes-construction-and-methodology.pdf
• https://www.lseg.com/en/ftse-russell/russell-reconstitution