The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity market. The Russell 2000 consists of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 98% of the total market capitalization of the U.S. equity market.
Russell 2000 Fact Sheet
- Ticker: RUT.
- Creation date: 1984.
- Composition: Small-cap. Consists of the 2,000 smallest companies in the Russell 3000 Index.
- Performance: this index has outperformed the S&P 500 Index over the long term.
- Weighting: the Russell 2000 Index is weighted by market capitalization.
- Exposure: The Russell 2000 Index is tilted towards consumer discretionary and technology stocks.
What Is the Russell 2000 Index?
Short definition: The Russell 2000 Index is a stock market index that measures the performance of the small-cap segment of the U.S. equity market.
More: The Russell 2000 Index is a stock market index made up of the 2,000 smallest companies in the Russell 3000 Index. These 2,000 companies are selected for inclusion in the Russell 2000 Index based on their market capitalization. In order to be eligible for inclusion in the Russell 2000 Index, a company must have a market capitalization of at least $300 million.
Understanding the Russell 2000 Index
The Russell 2000 is often used as a benchmark for investment funds that focus on small-cap stocks. The index is maintained by FTSE Russell Group and it includes the 2,000 smallest companies in the United States based on market capitalization.
Russell 2000 Reconstitution
The index is reconstituted every year in June, when the Russell 1000 Index and the Russell 3000 Index are also reconstituted. The stocks in the Russell 2000 Index are ranked by market capitalization, and the top 1,500 stocks are placed in the Russell 1000 Index. The next 500 stocks are placed in the Russell 3000 Index. Any stocks that do not meet the size requirements for either of those indexes are placed in the Russell 2000 Index.
Differences with other indexes
The Russel 2000 is a popular index to track because it is more volatile than the larger indexes, such as the Dow Jones Industrial Average and the S&P 500. This makes it a good indicator of how the overall market is performing.
In conclusion, the Russell 2000 Index is a good benchmark for investors who want to invest in small-cap stocks.
