Russell ReconstitutionRussell Reconstitution

Webcast – www.indexuniverse.com/ www.nybot.comWebcast – www.indexuniverse.com/ www.nybot.com

May 21, 2004May 21, 2004

Kelly Haughton

Strategic Director, Russell Indexes

Kelly Haughton

Strategic Director, Russell Indexes

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Russell ReconstitutionKeep Indexes in Tune With Market Reality

PurposeObjectively and completely recalibrate capitalization, sector, and style indexes to ensure indexes measure intended segments.

ResultTruly representative style and capitalization indexes.

Each month, Russell Indexes are rebalanced to reflect significant changes in share capital.

Why reconstitute annually? Extensive research demonstrates that the annually reconstituted Russell Indexes accurately represent the capitalization segments that they are intended to represent and minimize the turnover required to reflect the segments as they change.1

1 Examining the Frequency of U.S. Reconstitution By Grant Gardner, Andra Kondra and Mahesh Pritamani, Investment Policy & Research, Frank Russell Company July 6, 2001

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Russell Reconstitution2004 Changes

Last Friday in June (June 25)

NASDAQ Closing Cross

Publishing of Provisional Returns

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Russell Reconstitution2004 Market Conditions

Broker projections: Lower % turnover

Higher $ in Russell index funds

More Liquid Russell Derivatives

1936 Tacoma, Headquarters

1969 New York 1979 London 1984 Sydney 1984 Toronto 1986 Tokyo 1991 Auckland 1994 Paris 1999 Singapore

1936 Tacoma, Headquarters

1969 New York 1979 London 1984 Sydney 1984 Toronto 1986 Tokyo 1991 Auckland 1994 Paris 1999 Singapore

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