Growth and Value Are Becoming Increasingly Difficult to Separate

Morgan Stanley examines the 2026 Russell Index Reconstitution and argues that traditional distinctions between growth and value investing are becoming increasingly blurred as large technology companies mature.

• The annual Russell reconstitution will shift companies across market-cap and style indexes, affecting portfolios benchmarked against trillions of dollars in passive and active assets.
• Mega-cap technology companies such as Amazon, Apple and Microsoft are increasingly appearing in both growth and value indexes as they combine strong growth with mature cash-flow characteristics.
• As a result, the Russell 1000 Value Index is becoming significantly more concentrated. Morgan Stanley estimates that its top three holdings will account for nearly 17% of the index after reconstitution, versus roughly 8% previously.
 

Explore the full analysis for insights into passive flows, index construction and how AI-era market leaders are reshaping traditional equity categories.