Apple shares could fall more under Russell indexes reconstitution

Apple shares could fall more as they’re set to lose their weighting and be reclassified in the annual reconstitution of the widely followed Russell indexes, reports Reuters. About $1.3 billion more will be sold in Apple shares at the market close on Friday, when the reconstitution of the Russell indexes takes effect, according to an analysis by Credit Suisse, a global financial services company headquartered in Zurich (and which provided the graphic).

The Russell Indexes are a family of global equity indices that allow investors to track the performance of distinct market segments worldwide. Many investors use mutual funds or exchange-traded funds based on the Russell Indexes as a way of gaining exposure to certain portions of the U.S. stock market. For example, the Russell 3000 index includes the 3,000 largest US companies according to market capitalization.

Because Apple has been aggressively buying back and retiring its stock, outstanding shares have dropped to less than 5.5 billion from 5.8 billion in late June 2015, when the Russell indexes were last recalibrated, according to Reuters data. Apple's weighting in the Russell 1000 will roughly fall to 2.52% from 2.77 percent, Credit Suisse said. The decline is due to the combination of fewer shares outstanding and Apple's smaller part of the index's capitalization.