Issue 38: Russell Microcap Rebalancing Opportunities

Fishing in the Russell Microcap additions and deletions lists.

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This issue contains my scrub of the Russell Microcap index preliminary additions and deletions list as of April 2024. The next issue will focus on the Russell 2000 add/deletes. A sortable spreadsheet is included at the bottom of this post.

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Each year the Russell indices rebalance to either add or remove companies from their respective benchmarks. In addition to the popular Russell 2000, there are a host of other Russell indexes that must do the same thing to maintain their size mandates or to clean up companies that don’t meet certain criteria. The preliminary list is released in May and the final rebalancing takes place in June.

My process for sifting through them has evolved since first doing this three years ago. What once was a focus just on the Russell 2000 deletions turned into an exercise of looking at additions too. This year I decided to take a look at the Russell Microcap Index as well, which ranges from $30 million to $1.4 billion.

Going through the list took about 15 hours. I’m a bit disappointed there weren’t more interesting candidates in the Microcap rebalancing list, although I suppose I can’t complain about having found one current idea in the mix (noted below).

The chart below from the Russell website¹ shows the cutoff ranges for 2023 and 2024.

Here’s a history of the ranges for the Russell 1000, 2000, and 3000:

Russell Microcap Additions