DEFINITION of 'Russell Top 50 Index'

A market capitalization weighted index of the 50 largest stocks in the Russell 3000 universe of U.S.-based equities. The index can be considered a representation of mega cap stocks, as the average member's market cap is more than $175 billion.

The index is reconstituted annually to account for new and growing member companies.

BREAKING DOWN 'Russell Top 50 Index'

Because modern mega cap companies are so large, even though the index holds just 50 stocks it still represents a large proportion of all U.S. equities. For example, in 2007, the market cap of the stocks in the Russell Top 50 Index accounted for more than 40% of the total market capitalization of all U.S.-based equities.

The Russell Top 50 Index also pays an above average dividend yield compared to the S&P 500, a reflection of the general safety and cash flow generation found among the largest traded companies.

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