The U.S. broad-market Russell 3000 Index announced plans Tuesday to add 16 newly public companies to its list of 3,000 largest U.S. public companies. The news is a sign that the number of U.S. initial public offerings is growing, as it represents an increase from only 1 new public company added to the U.S. benchmark in the first quarter of 2009 -- but it also indicates a drop from the 28 added in the fourth quarter.
The list of 16 IPOs includes seven stocks in the financial services sector, including four real estate investment trusts. The new companies will be added to the index after the close of U.S. markets on March 31 as part of the quarterly rebalancing of the benchmark.
Four Large Caps, 12 Small Caps
In addition to qualifying for the Russell 3000, four of the newly traded companies also rank high enough, in terms of market capitalization, for membership in the large-cap Russell 1000 Index: Cobalt International Energy (CIE), KAR Auction Services (KAR), Piedmont Office Realty Trust (PDM) and Symetra Financial (SYA). The other 12 IPOs are set for inclusion to the small-cap Russell 2000 Index.
Meanwhile, Greenwich, Conn.-based Renaissance Capital also reported 19 IPO pricings this year and 42 IPO filings. The average IPO this year has returned 3.8% from its offer price.
Rolf Agather, director of index research and innovation for Russell Investments, said the quarterly reshuffling of stocks is designed to ensure the indexes mirror current market conditions and provide investors with benchmarks that reflect the comprehensive global market.
The Russell Indexes select stocks for inclusion based on their market capitalization, and stocks that don't meet capitalization requirements are culled annually from the list. The index will be reconstituted at the end of the second quarter.
Learn the most important step in structuring an investment portfolio.View Course »