The previous four indexes we covered were all based on the top companies in the U.S., most of them worth billions of dollars. The Russell 2000 measures the performance of smaller stocks (small caps) that are often excluded from the big indexes. The average market capitalization in the Russell 2000 is approximately $530 million. To put that into perspective, Microsoft alone has a market capitalization of more than $248 billion at the time of this writing.
|Created By:||Frank Russell Company in 1984|
|Number of Companies:||~ 2,000|
|Types of Companies:||Small cap companies from various industries. Exclusions are stocks under $1 and pink sheets.|
|Selection Criteria:||This index consists of the smallest 2,000 companies in the Russell 3000 index.|
|How it\'s Calculated:||The Russell 2000 is weighted on market capitalization.|
|Advantages: A well-diversified index of small-cap stocks focused on non-industry-leading companies.|
|Disadvantages: The Russell 2000 Index tends to be more volatile than large-cap indexes. However, when small caps come into favor with investors, it tends to perform very well. But the index can be stuck in the doldrums for years when small caps are languishing.|
|Investing: There are many index funds that track the Russell 2000.|
InvestingThe S&P 500 and Russell 2000 are used as benchmarks for broader segments of the U.S. stock market. Each index has its own approach to measuring stocks.
InvestingWe look at the differences of investing in the S&P 500 vs. the Russell 2000 exchange-traded fund, and when to choose the one over the other.
InvestingThe Russell 2000 index represents the small cap universe, with a broad selection of fast growth companies at the bottom end of the capitalization spectrum.
InvestingAnalyze the recent stock performance for different types of stocks to determine which equities could gain or benefit ahead of Russell index reconstitution.
InvestingFind out more about the iShares Russell 2000 exchange-traded fund, or ETF, the characteristics of this ETF and its suitability for investing.
InvestingLearn about the iShares Russell 1000 Value exchange-traded fund (ETF), which invests in value stocks that are included in the Russell 1000 Value index.
InvestingFind out how the SPDR Dow Jones Industrial Average ETF compares with the iShares Russell Top 200 as mega-cap exchange-traded funds.
InvestingIn our recent article we pointed out a divergence between the small cap Russell 2000 and the S&P 500. However, the divergence has narrowed.
RetirementDiscover four mutual funds administered and managed by Russell Investments that would add diversification benefits to a retirement portfolio.