DEFINITION of 'Russell 1000 Index'
An index of approximately 1,000 of the largest companies in the U.S. equity markets, the Russell 1000 is a subset of the Russell 3000 Index. The Russell 1000 (maintained by the Russell Investment Group) comprises over 90% of the total market capitalization of all listed U.S. stocks, and is considered a bellwether index for large cap investing.
The Russell 1000 is a market capitalization-weighted index, meaning that the largest companies constitute the largest percentages in the index and will affect performance more than the smallest index members.
BREAKING DOWN 'Russell 1000 Index'
The Russell 1000 is a much broader index than the often quoted Dow Jones Industrial Average (DJIA) and Standard & Poor's 500 Index (S&P 500), although all three are considered large cap stock benchmarks. Many institutional managers prefer the Russell 1000 as a barometer for large cap investments as a whole; the average market cap of a Russell 1000 company is over $80 billion, and all of the index members are considered highly liquid stocks.
An ETF representing the Russell 1000 can be purchased for a minimal expense ratio; the ETF is called the iShares Russell 1000 Index and trades on the New York Stock Exchange (NYSE) under the ticker IWB.