DEFINITION of 'Russell 2500 Index'

A broad index featuring 2,500 stocks that cover the small and mid cap market capitalizations. The Russell 2500 is a market cap weighted index that includes the smallest 2,500 companies covered in the Russell 3000 universe of United States-based listed equities.

The index is designed to be broad and unbiased in its inclusion criteria, and is recompiled annually to account for the inevitable changes that occur as stocks rise and fall in value.

BREAKING DOWN 'Russell 2500 Index'

The space covered by the blending of small and mid cap stocks is sometimes referred to as "smid" cap, and can describe any company up to the $10 billion market cap range. These companies are generally considered to be more growth oriented than large cap stocks, and may experience more volatility than the latter over long-term periods.

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