RUSSEL 2000 (US SMALL CAP ^RUT)

Russell 2000 is one of the most popular benchmarks for small-cap stocks. It is widely used by many mutual funds and ETF investors.

The Index

Russell 2000 (^RUT) is a stock market index that measures the performance of the 2,000 small companies listed in the Russell 3000 Index. Russell 2000 serves as the leading benchmark for institutional investors around the globe.

Key Takeaways

• The index started in 1984 and it is managed by FTSE Russell
• Russell 2000 is the most common benchmark for "small-cap" mutual funds
• The index includes about 2,000 small-cap companies
• The Russell 2000 is a subset of the Russell 3000 Index (includes about 96% of the investable US markets)
• Investors can invest in the Russell 2000 via index ETFs or Russell 2000 index mutual funds
• Traders can trade Russell 2000 through futures contracts or CFDs

Chart: Russell 2000 historical chart (6-month candles)

Calculation and Usage

Russell 2000 is a market-capitalization-weighted index. This means the participation of each company in the index is determined by the size of the company’s market value.

The average market cap for a company listed on Russell 2000 is $2.70 billion
The median market cap for a company listed on Russell 2000 is $0.77 billion
The index first traded above the 1,000 level in 2013 (May 20)

Russell 2000 Annual Reconstitution

Between May and June of each year, the Russell 2000 announces changes to the small-cap index.

Two key sub-indexes

The Russell 2000 Growth Index (measures the performance of listed companies with higher forecasted growth values)
The Russell 2000 Value Index (measures the performance of listed companies with lower P/Bv (Price/Book value) and forecasted growth values)

Breakdown of the index

Russell 2000 includes the bottom two-thirds of the Russell 3000 index (in terms of company size), however, it only represents 7% of the total Russell 3000 market cap.

Table: Breakdown of the index by industry

All Russel Indices

This is the full range of Russell indices:

• Russell 1000
• Russell 2000
• Russell 2500
• Russell 3000
• Russell Microcap
• Russell Midcap
• Russell Top 200
• Russell Top 500
• Russell Top 50 Mega Cap

RUSSEL 2000

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Sources:

• Russel CBOE Options
• Investopedia “Russel 2000 by industry”