The takeaway is that while these aren’t exactly tiny enterprises, they aren’t giant companies either. That’s the key difference between the Russell 2000 and the “headline” indexes. Instead, here are 10 of the largest Russell 2000 companies, just to give you an idea of the types of companies that make up the index.
You can invest in the index rather easily through a mutual fund or exchange-traded fund (ETF) designed to track it passively. To keep up to date on small-cap stocks, the Russell 2000 index is reconstituted annually to ensure that the companies in it are representative of the small-cap universe of stocks. In simple terms, if a company gets too large, it will be removed from the Russell 2000 currency and exchange rate real index.
How is the Russell 2000 different from other major stock indexes?
Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. While the Russell 2000 is designed as a barometer of small-cap stocks, there are some subindexes composed of stocks in the Russell 2000. The largest company in the Russell 2000 index has a market cap of roughly $10 billion. The smaller ones have market caps in the $200 million range.
In a nutshell, the Russell 2000 is composed of smaller and more volatile stocks than those in large-cap indexes. On the other hand, the large number of companies in the index helps to mitigate the risk since it’s less reliant on any particular stock’s performance. Unlike its more famous S&P counterpart, the S&P SmallCap 600 tracks smaller companies, similar to the Russell 2000. However, since the S&P SmallCap 600 tracks less than one-third of the number of companies in the Russell 2000, it provides a much narrower understanding of the small-cap market as a whole. Like the S&P 500, many economists consider the Russell 2000 a reasonably accurate barometer of the U.S. economy, particularly as it applies to smaller companies. This tool will download a .csv file for the View being displayed.
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The Russell 2000 is rebalanced every June, and companies are added, deleted, or kept. The Russell 2000 Index, sometimes abbreviated as “Russell 2K,” is the most widely used index of small-cap stocks — stocks with a relatively 11 business books you must read small market capitalization. The Russell 2000 Index is weighted using a combination of market cap and the other indexes a stock is listed on.
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For instance, investors can use index futures or index-based mutual funds that track the Russell 2000. The most heavily traded of the ETFs is the iShares Russell 2000 index ETF (IWM). The Dow Jones Industrial Average is a stock index that tracks 30 of the largest U.S. companies.
What Is the Russell 2000 Stock Market Index?
The Russell 2000 Index was launched in 1984 by the Frank Russell Company. It is a U.S. index managed by FTSE Russell, a subsidiary of the London Stock Exchange (LSE) Group. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
In between the annual rank day reconstitution, eligible companies that go public, like through an initial public offering (IPO), and qualify by market cap can be added to the Russell 2000 on a quarterly basis. Because of this, the Russell 2000 may sometimes track more than 2,000 stocks. The Russell 2000 is a stock market index that tracks the performance of 2,000 small-cap U.S. public companies.
Many investors compare small-cap mutual funds’ movements against the index’s movement. Whether you welcome the higher-risk/higher-reward opportunity or not, most investors will not want to make Russell 2000 funds a major portion of their portfolio. Even with the broad exposure of 2,000 companies, the risk inherent to this market segment means it is not necessarily an index to stake the majority of your portfolio on. That said, small caps frequently experience more severe price swings than larger companies, meaning white-knuckle investors may find that Russell 2000 funds triggers panic that large-cap indexes do not.
- It’s no surprise that many funds and exchange-traded funds (ETFs) mirror or are based on the Russell 2000.
- The S&P 500 and Dow Jones Industrial Average (DJIA) indices, on the other hand, track large-cap stocks.
- As of March 31, 2024, the average value for a company on the Russell 2000 was $4.82 billion, while the median market cap was $960 million.
- Because small-cap companies make up a much smaller share of the U.S. stock market than large caps, the companies in the Russell 2000 represent approximately 10% of the U.S. stock market’s total market capitalization.
- For other static pages (such as the Russell 3000 Components list) all rows will be downloaded.
Barchart Plus Members have 10 downloads per day, while Barchart Premier Members may download up to 100 .csv files per day. At the top, you’ll find a histogram containing today’s high and low price. The histogram shows where the open and last price attention required! cloudflare fall within that range. One good example is the Vanguard Russell 2000 ETF (VTWO -1.9%), which invests in all the stocks in the index according to their relative weights. With a small (0.10%) expense ratio, the ETF’s fees are low, and its long-term performance should be virtually identical to that of the index itself.
Created in 1896, it is one of the oldest stock indexes, and its performance is widely considered a useful indicator of the health of the entire U.S. stock market. A stock market index shows how investors feel an economy is faring. An index collects data from a variety of companies across industries. Together, that data forms a picture that helps investors compare current price levels with past prices to calculate market performance.
However, with that greater potential for risk comes built-in greater potential to grow exponentially. It’s easier, after all, to double your value when your stock is worth $10 than when it is worth $100. The index’s returns can be replicated by investors who take the trouble to create a sizeable and complex portfolio that mirrors the index.
You can re-sort the page by clicking on any of the column headings in the table. The Russell 2000 is designed to provide the best indicator of how small-cap U.S. stocks are doing. With that in mind, here’s a rundown of what investors should know about the Russell 2000 Index, how it works, and whether it could be a smart investment choice. As of FTSE Russel’s index factsheet dated March 31, 2024, the index’s top three holdings were Super Micro Computer (SMCI), Microstrategy (MSTR), and Comfort Systems USA (FIX). It is highest weighted in industrials, followed by healthcare, then financials. The table below highlights a breakdown of the index by industry.
The Russell 2000 index can be a savvy addition to an investment portfolio, but it’s not necessarily the right choice for everyone. A number of brokerage companies offer Russell 2000 ETFs and index funds. You cannot, however, purchase Russell 2000 funds directly from FTSE Russell Group. The smallest 1,000 companies in the Russell 2000 make up the Russell 1000 Microcap Index. The Russell 2000 is itself composed of the two-thousand smallest companies in the broader Russell 3000 Index. Pages are initially sorted in a specific order (depending on the data presented).
The index is the most widely quoted measure of the overall performance of small-cap to mid-cap stocks. It represents approximately 7% of the total Russell 3000 market capitalization and is made up of the bottom two-thirds in terms of company size of the Russell 3000 index. The larger index reflects the movements of nearly 96% of all publicly traded U.S. stocks. It’s no surprise that many funds and exchange-traded funds (ETFs) mirror or are based on the Russell 2000. Because small-cap companies make up a much smaller share of the U.S. stock market than large caps, the companies in the Russell 2000 represent approximately 10% of the U.S. stock market’s total market capitalization. In comparison, the Russell 1000’s large-cap stocks represent approximately 92% of the total U.S. stock market.
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