Russell Indexes to Add IPOs on a Quarterly Basis Change in Methodology Enhances Market Representation of Index.

TACOMA, Wash. -- Beginning Sept. 30, Russell indexes will add initial public offerings (IPOs) on a quarterly basis in order to enhance how well each index reflects its segment of the U.S. equity market. The revised methodology of adding IPOs on a quarterly rather than annual basis means approximately 40 IPOs are expected to be added to the Russell indexes at the end of the third quarter.

"As an IPO becomes part of the opportunity set for investors, Russell indexes will capture these new securities in a more timely manner," said Lori Richards, senior product manager, Russell indexes. "Our client advisory board recommended this change, and our research shows it offers better representation of market changes with minimal impact on turnover or related costs."

IPOs previously were added as part of Russell's annual index reconstitution process, which meant an IPO could wait nearly a year for inclusion. Existing index members that grow or shrink in market cap during the year will continue to remain in the respective indexes until the annual reconstitution.

"This change is structured in a way that allows Russell indexes and index membership to remain objective and transparent," said Richards. "We'll conduct a systematic review each quarter, and our methodology for IPO additions will be clearly stated on www.russell.com."

The quarterly IPO additions process works as follows:

--On the quarterly "market snapshot" date, which will be Aug. 31 for the third quarter, Russell will check all recent IPOs to see how the stock's market cap ranks on that date relative to the market cap breaks established at the latest reconstitution.

--A list of IPOs that qualify for inclusion in Russell indexes would be announced publicly on the 15th of the following month, which will be Sept. 15 this quarter.

--Any IPO which has a market cap that justifies inclusion in an index, and which meets Russell's other membership rules, would be added to the appropriate indexes after the U.S. equity markets close on the last day of the quarter, which is Sept. 30 this quarter.

To be eligible for inclusion, the IPO date would need to fall within the three-month period prior to the "rank" date. As IPOs are added to Russell indexes each quarter, Russell will not delete existing index members to make room for them, but will continue to reconstitute the indexes fully each year at the end of the second quarter.

As a result of the annual reconstitution process in 2004 Russell added 100 IPOs to its family of U.S. equity indexes, while only 28 IPOs were added in 2003. The record was set in 2000 when 320 IPOs moved into Russell indexes.

About Russell

Russell Investment Group, a global leader in multi-manager investment services, provides investment products and services in more than 35 countries. Russell manages more than $110 billion in assets and advises clients worldwide representing more than $1.8 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo.

Russell Investment Group is a registered trade name of Frank Russell Company, a Washington, USA corporation, which operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.