The two primary reasons for creating the Russell Global Indexes are plan sponsors’ willingness to look outside global benchmarks and take greater risks and the constant search for higher returns that has been popping up in the small-cap sector of emerging markets, said Mark Thurston, Head of Global Equity Research at Russell, at a press conference in New York City.

The index covers 98% of the investable global market, including more than 10,000 stocks and is divided into a family of indexes that cover 22 regions and 63 countries that are picked by float-adjusted market capitalization and their trading liquidity.

The spilt among stocks includes Russell 3000 Index as its U.S. component (1,000 large cap and 2,000 small cap) and approximately 2,000, non-U.S. large-cap and approximately 5,000 non-U.S. small-cap stocks.

David Grieger, Managing Director, Russell Indexes also highlighted another reason for coming out with a global index, as globalization nudges investment managers to realize “they can’t live in their own domestic marketplace.” He also pointed out that managers are no longer honing in on a particular country to make investments, but are increasingly looking at companies and sectors.

“These investors are finding that distinctions between traditionally “emerging’ and “developed’ markets have blurred as companies and financial markets grow in sophistication,” Grieger said at the press conference. “While the new investment panorama has increased opportunities for investors, it also has made it more difficult to evaluate performance.”

According to a news release, the other key features of the Russell Global Indexes include:

• The global-design eliminates the gaps and overlaps created by other index providers when investment managers benchmark portfolios to different regional indexes. It also helps investors avoid sampling bias inherent in indexes that only include selected stocks in different countries or regions.

• Market capitalization breaks are applied globally, not on a country-by-country basis, to make sure companies of the same size are accurately represented in the large- and small-cap indexes across regions and countries. For example, Russell uses the same cutoff point to determine small-cap stocks in the UK as it does in Panama.

• Russell’s global small-cap universe includes more than 7,000 investable companies from countries throughout the world. It includes the Russell 2000 as well as the Russell Nomura Small Cap Index in Japan.

• The modular design enables access to numerous market segments across a variety of dimensions. For example, it offers access to large-cap or small-cap stocks across regions or countries.