Russell 1000 Growth Index Concentration Implications: A Broader Lens on Large Cap Growth September 30, 2026 Accessing large-cap growth throu

The Russell 1000 Growth Index has become too concentrated in a few mega-cap technology companies to remain a broad proxy for long-term growth.

• From 1997 through 2025, the highest earnings-growth quintile in the Russell 1000 delivered annualized five-year returns near 19%, versus less than 1% for the slowest-growing quintile.
• The index’s top 10 holdings now represent 57% of its weight, compared with a historical range of 20% to 35%; their weight has nearly doubled since 2013.
• Technology accounts for 54% of the index, rising to 73% when technology-related companies in other sectors are included, while semiconductors have gained further importance within technology.
• This concentration has increased beta and tracking error relative to the S&P 500, making passive investors more exposed to company-specific and sector-specific outcomes.
• The Magnificent 7’s five-year average EPS growth was 30% through June 2026, but their three-year forward average is 23%, leaving them no longer in the Russell 1000’s top growth quintile.
• Jennison distinguishes between emerging or inflecting growers, often underrepresented in passive benchmarks, and durable compounders with strong competitive moats and cash generation.

Takeaway: Investors should complement established mega-cap leaders with emerging winners and inflecting growers through a broader, active growth portfolio, while recognizing that the Magnificent 7 remain high-quality businesses with durable advantages.