DEFINITION of 'Russell 1000 Index'

The Russell 1000 Index is an index of approximately 1,000 of the largest companies in the U.S. equity market. The Russell 1000 is a subset of the Russell 3000 Index. It represents the top companies by market capitalization. The Russell 1000 typically comprises approximately 90% of the total market capitalization of all listed U.S. stocks. It is considered a bellwether index for large cap investing. 

BREAKING DOWN 'Russell 1000 Index'

The Russell 1000 is a much broader index than the often quoted Dow Jones Industrial Average and Standard & Poor's 500 Index, although all three are considered large cap stock benchmarks. (See also Investment Fundamentals: S&P 500 Index vs. Russell 1000 Index.) The Russell 1000 is managed by FTSE Russell. FTSE Russell also manages the Russell 3000 and Russell 2000 as well as numerous alternative indexes derived from each.

Methodology and Construction

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. The Russell 1000 components are reconstituted annually in May. However, newly listed stocks with initial public offerings are considered for inclusion quarterly.

To determine the holdings of the Russell 1000, FTSE Russell ranks all of the stocks included in the Russell 3000 by market capitalization and identifies the market cap breakpoint of the 1,000th stock ranking. This breakpoint is the primary market capitalization used to determine index eligibility. Many stocks are swapped between the Russell 1000 and Russell 2000 at the annual reconstitution however variation around the market cap breakpoint is the determining factor.

Characteristics

Performance and characteristics of the Russell 1000 Index are provided by FTSE Russell monthly. As of October 31, 2017, the Russell 1000 had 979 holdings. The average market cap was $174.2 billion. The largest company by market cap was Apple (AAPL) at $881.3 billion. Year-to-date through October 2017, the Russell 1000 had a return of 16.8%, outperforming the Russell 3,000’s return of 16.4%.

Investing in the Russell 1000 Index

Many investors prefer the Russell 1000 for large cap portfolio exposure. The iShares Russell 1000 Index ETF (IWB) is one of the leading funds offering comprehensive investment in all of the Russell 1000 components. IWB is an index fund that seeks to match the holdings and return of the Russell 1000 Index. It has an expense ratio of 0.15%. Assets under management as of November 17, 2017 were $19.3 billion. The ETF trades on the New York Stock Exchange (NYSE) with average daily trading volume of 831,200 shares. As of November 17, 2017, IWB was trading at $143.63 with a year-to-date return of 15.4%.

FTSE Russell also offers a number of index variations derived from the Russell 1000. Variations include: Russell 1000 Value, Russell 1000 Growth, Russell 1000 Defensive, Russell 1000 Dynamic, Russell 1000 Growth-Defensive, Russell 1000 Growth-Dynamic, Russell 1000 Value-Defensive and the Russell 1000 Value-Dynamic.

iShares also offers a passively managed index ETF for the Russell 1000 Growth and Russell 1000 Value.

iShares Russell 1000 Growth ETF (IWF)

IWF has an expense ratio of 0.20%. Assets under management as of November 17, 2017 were $39.1 billion. The ETF trades on the New York Stock Exchange with average daily trading volume of 1.25 million shares. As of November 17, 2017, IWF was trading at $130.96 with a year-to-date return of 24.84%. (See also IWF: iShares Russell 1000 Growth ETF.)

iShares Russell 1000 Value ETF (IWD)

IWD has an expense ratio of 0.20%. Assets under management as of November 17, 2017 were $38.3 billion. The ETF trades on the New York Stock Exchange with average daily trading volume of 1.3 million shares. As of November 17, IWD was trading at $119.30 with a year-to-date return of 6.49%. (See also IWD: iShares Russell 1000 Value ETF.)

RELATED TERMS
  1. Russell 3000 Growth Index

    The Russell 3000 Growth Index is a market capitalization weighted ...
  2. Russell 3000 Index

    The Russell 3000 Index is a market-capitalization-weighted equity ...
  3. Russell Small Cap Completeness ...

    The Russell Small Cap Completeness Index is a market capitalization ...
  4. Reconstitution

    A reevaluation of a market index that involves adding and removing ...
  5. Russell Microcap Index

    The Russell Microcap Index is an index of almost 1,550 small ...
  6. CBOE Russell 2000® Volatility Index ...

    The CBOE Russell 2000® Volatility Index is an indicator of the ...
Related Articles
  1. Insights

    Investment Fundamentals: S&P 500 Index Vs. Russell 1000 Index

    Learn about the similarities and differences between the S&P 500 and the Russell 1000 indices, and discover why investors may choose one over the other.
  2. Investing

    IWM: iShares Russell 2000 Index ETF

    Find out more about the iShares Russell 2000 exchange-traded fund, or ETF, the characteristics of this ETF and its suitability for investing.
  3. Investing

    IWD: iShares Russell 1000 Value ETF

    Learn about the iShares Russell 1000 Value exchange-traded fund (ETF), which invests in value stocks that are included in the Russell 1000 Value index.
  4. Investing

    TNA: Direxion Small Cap Bull 3X ETF

    Read about a triple-leveraged exchange-traded fund that aims for 300% of the returns of the Russell 2000 Index: the Direxion Small Cap Bull 3X.
  5. Investing

    IWM vs. VTWO: Comparing U.S. Small-Cap ETFs

    Find out how two of the largest small-cap exchange-traded funds, the iShares Russell 2000 and the Vanguard Small-Cap ETF, compare with each other.
  6. Investing

    IWN: iShares Russell 2000 Value ETF

    Read an in-depth description of the iShares Russell 2000 Value fund, an exchange-traded fund that tracks undervalued small-cap stocks.
  7. Investing

    A New Idea for Broad Market Exposure

    This new ETF is an effective way to combine small- and mid-cap exposure.
  8. Insights

    Apple Loses Weighting in the Russell Index (AAPL)

    Apple's weighting in the Russell 1000 will be reduced resulting in shares being sold
  9. Investing

    E*TRADE: Russell 2000 Set to Join Other Indexes in Passing Pre-Correction Highs

    The Russell 2000 Index is on its way to join other indexes in surpassing their pre-correction highs, E*TRADE reported.
  10. Investing

    Build A Model Portfolio With Style Investing

    This sophisticated approach will add flair to your returns.
RELATED FAQS
  1. What should I use as a benchmark for my small-cap stock portfolio?

    The Russell 2000 and S&P SmallCap 600 are two of the best indexes to use as a benchmark for small-cap performance. Read Answer >>
  2. Is there an index for tracking mid-cap stocks?

    Learn the specifics about indexes available for tracking companies with market capitalizations in the medium-sized, small ... Read Answer >>
Hot Definitions
  1. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  2. Current Assets

    Current assets is a balance sheet account that represents the value of all assets that can reasonably expected to be converted ...
  3. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  4. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  5. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
  6. Depreciation

    Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account ...
Trading Center