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.”

RELATED TERMS
  1. Russell 1000 Index

    The Russell 1000 Index is an index of approximately 1,000 of ...
  2. Russell 2000 Index

    The Russell 2000 index measures the performance of approximately ...
  3. Russell 3000 Value Index

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

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

    The Russell Microcap Index is an index of almost 1,550 small ...
  6. Mega Cap

    Mega cap is a designation for the largest companies in the entire ...
Related Articles
  1. Insights

    Investment Fundamentals: S&P 500 Vs. Russell 1000

    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

    S&P 500 Vs. Russell 2000 ETF: Which Should You Get?

    We look at the differences of investing in a S&P 500 vs. the Russell 2000 exchange-traded fund, and when to choose the one over the other.
  3. Investing

    DIA vs. IWL: Comparing ETFs with the Largest U.S. Companies

    Find out how the SPDR Dow Jones Industrial Average ETF compares with the iShares Russell Top 200 as mega-cap exchange-traded funds.
  4. Investing

    Key Factors Of The Russell 2000 Index

    The Russell 2000 index represents the small cap universe, with a broad selection of fast growth companies at the bottom end of the capitalization spectrum.
  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

    3 ETFs Suitable for Young Investors (IUSG, VWO)

    Discover detailed analyses of three exchange-traded funds with growth strategies, and learn about their suitability for young investors.
  7. Investing

    ETF Bubble or No Bubble?

    Index funds are taking an ever larger piece of the ETF pie, and this raises liquidity concerns for investors.
  8. Investing

    Small-cap, mid-cap, and large-cap stocks: A 2016 comparison

    Find out what to happened with small-cap, mid-cap, and large-cap stocks in 2016 – and learn why it is important to diversify between all three.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. Why can you short sell an ETF but not an index fund?

    Because you purchase and redeem mutual fund units from the mutual fund company and (generally) not on the open market, you ... Read Answer >>
  4. What exactly is an ETF portfolio?

    Learn what exchange-traded funds (ETFs) are and their advantages to investors, what a portfolio of ETFs is, and discover ... Read Answer >>
Trading Center