What is the 'Russell Top 50 Index'

The Russell Top 50 Index is a market-capitalization-weighted index of the 50 largest stocks in the Russell 3000 universe of U.S.-based equities.

BREAKING DOWN 'Russell Top 50 Index'

The Russell Top 50 Index holds just 50 stocks, but because modern mega cap companies are so large, 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 percent of the total market capitalization of all United States-based equities. Russell U.S. Indexes are the leading U.S. equity benchmarks for institutional investors. This broad range of U.S. indexes allow investors to track current and historical market performance by specific size, investment style and other market characteristics.

All Russell U.S. Indexes are subsets of the Russell 3000 Index, which includes the well-known large-cap Russell 1000 Index and small cap Russell 2000 Index. The Russell U.S. Indexes are designed as the building blocks of a broad range of financial products, such as index tracking funds, derivatives and Exchange Traded Funds (ETFs), as well as fulfilling their role as performance benchmarks. 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.

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.

Mega-Cap ETFs on the Russell Top 50 Index

Nasdaq’s website ran a Zacks.com-reported story in June 2018 headlined “4 Solid Reasons to Buy Mega-Cap ETFs Now.” Mega-cap generally describes companies with a market capitalization above $300 billion. An ETF, or exchange-traded fund, typically invests in a security tracking an index, an index fund, bonds, or a commodity. 

The article analyzed data based in part on the Russell 2000 Index, saying that though small-cap stocks led in the first half of the year from February to May, June is set to bring a rise in mega-caps. The article lists its top four recommendations for investors when looking to ETFs: the SPDR Dow Jones Industrial Average ETF DIA, which Zacks says is the both the biggest and most popular ETF across the mega-cap landscape; the Vanguard Mega Cap Growth ETF MGK, which looks at the growth segment and so tracks the CRSP US Mega Cap Growth Index; the Vanguard Mega Cap Value ETF MGV, which tracks the CRSP US Mega Cap Value Index and offers investors a source for value stocks; and the Invesco S&P 500 Top 50 ETF XLG, a fund that tracks the S&P 500 Top 50 ETF Index, measuring "the cap-weighted performance of 50 of the largest companies on the S&P 500 index, reflecting the performance of U.S. mega-cap stocks.”

  1. Russell 1000 Index

    The Russell 1000 Index is an index of approximately 1,000 of ...
  2. Russell 3000 Value Index

    Russell 3000 Value Index is a market-capitalization weighted ...
  3. Russell 3000 Index

    The Russell 3000 Index is a market-capitalization-weighted equity ...
  4. Russell Top 200 Index

    The Russell Top 200 Index is a market capitalization weighted ...
  5. Russell 2500 Index

    The Russell 2500 Index is a broad index, featuring 2,500 stocks ...
  6. Russell Midcap Index

    The Russell Midcap Index is a market capitalization weighted ...
Related Articles
  1. Investing

    A Surprise Among Small-Cap ETFs

    Small-cap ETFs are disappointing this year, but that is not true of this growth ETF.
  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

    Russell Rebalance Study: What You Need to Know

    Analyze the recent stock performance for different types of stocks to determine which equities could gain or benefit ahead of Russell index reconstitution.
  4. Investing

    The Top 3 ETFs For Investing in the Russell 200 Index (IWL, IWY)

    Learn about three ETFs that track the Russell Top 200 Index and how these ETFs have a very high correlation with the S&P 500 index.
  5. 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.
  6. Investing

    An Unheralded Low Beta ETF

    This low beta ETF tracks an offshoot of a popular index and could be a better bet than its cap-weighted rivals.
  7. 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.
  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. What are some of the best small cap index funds?

    Learn about the best small-cap index funds, such as the iShares Russell 2000, IWM due to its low costs; liquidity; and diversification. Read Answer >>
  3. Is there such a thing as a nano cap or micro cap index?

    While there are indexes that track micro cap stocks, there are few indexes tracking nano caps. Although definitions vary, ... Read Answer >>
Trading Center