What is the Russell 2000 Index?

The term Russell 2000 Index refers to a stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index. The Russell 2000 is managed by London's FTSE Russell Group and is widely regarded as a bellwether of the U.S. economy because of its focus on smaller companies that focus on the U.S. market.

What is the difference between Russell 2000 & Russell 1000?

The Russell 2000 Index ( RTY) is a subset of that index and includes the 2000 components with the lowest market capitalizations. The Russell 1000 Index, meanwhile, contains the 1000 components with the largest market capitalizations. Investors can reference the Russell 2000 to gauge how small-cap stocks are performing as a whole.

What is Russell 2000 reconstitution?

For the Russell 2000, the purpose is to remove companies that have outgrown the index and would distort measurements of the small-cap segment of the stock market. Reconstitution is slated for the fourth Friday in June each year. The annual event is marked by higher-than-normal trade volume for stocks that move off of one index or onto another.

What makes a company a Russell 2000 stock?

To be included in the Russell 2000, a company must first be in the Russell 3000, which includes about 96 percent of the U.S. stock market. FTSE Russell then ranks those companies by their market cap, and the bottom 2,000 make up the Russell 2000 Index. The top 1,000 companies make up the Russell 1000, which tracks large-cap companies.