Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. One good example is the Vanguard Russell 2000 ETF (VTWO 0.19%), 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. A number of brokerage companies offer Russell 2000 ETFs and index funds.

  1. 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.
  2. 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.
  3. While the Russell 2000 is designed as a barometer of small-cap stocks, there are some subindexes composed of stocks in the Russell 2000.
  4. Pages are initially sorted in a specific order (depending on the data presented).
  5. To determine which stocks will make up the index, FTSE Russell ranks all U.S. securities from largest to smallest market capitalization.

NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. The Russell 2000 announces changes to the small-cap index between May and June of each year. Because it is closely followed by mutual funds managers and individual investors, speculation as to which companies will be added can cause a jolt in short-term demand. Both the S&P 500 and Russell 2000 indexes are market-cap-weighted.

How does the Russell 2000 Index work?

The index is comprised of the 2,000 smallest companies in the Russell 3000, which itself covers roughly 98% of the stocks publicly traded in the U.S. The Russell 2000 is rebalanced every June and new companies are included or deleted from the index. The Russell 2000 Value Index tracks the performance of companies with lower price-to-book ratios, which shows a company’s market price relative to its balance sheet. The Russell 2000 Growth Index is a subset of companies with higher price-to-value ratios, or those expected to have higher growth values in the future. The Russell 2000 Index is market cap-weighted, adjusted by each company’s number of shares outstanding.

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. For the major indices on the site, this widget shows the percentage of stocks contained in the index that are above their 20-Day, 50-Day, 100-Day, 150-Day, and 200-Day Moving Averages. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Market Data

It 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. Russell 2000 constituents are chosen based on their market size and membership in the Russell 3000, an index of the largest 3,000 companies.

Small-cap stocks underperform after hotter-than-expected inflation data

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 Oct. 31, 2023, the index’s top three holdings were Super https://forexhero.info/ Micro Computer (SMCI), Matador Resources (MTDR), and Chord Energy (CHRD). It is highest weighted in healthcare, followed by industrials and financials. The table below highlights a breakdown of the index by industry.

While the Russell 2000 is designed as a barometer of small-cap stocks, there are some subindexes composed of stocks in the Russell 2000. As a real-world example, in the 2021 reconstitution, GameStop (GME 1.12%) was added to the Russell 1000 and removed from the Russell 2000 after its price fxcm soared in the meme stock craze. In all, 56 companies were added to the Russell 1000 in 2021, with 30 of them moving up from 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.

Scroll through widgets of the different content available for the symbol. The “More Data” widgets are also available from the Links column of the right side of the data table. Available only with a Barchart Plus or Premier Membership, you can base a Stock Screener off the symbols currently on the page. This lets you add additional filters to further narrow down the list of candidates. At the top, you’ll find a histogram containing today’s high and low price.

The Russell 2000 Index, referred to as the Russell 2000, follows the performance of a group of roughly 2,000 small-cap stocks. Its focus on smaller companies makes it a common indicator for that segment of the U.S. stock market, which includes public companies with market capitalization between $250 million and $2 billion. It’s no surprise that many mutual funds and exchange-traded funds (ETFs) are tied to or based on the Russell 2000. 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.

You cannot, however, purchase Russell 2000 funds directly from FTSE Russell Group. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. Here is a list of our partners and here’s how we make money.

The Russell 2000 is, itself, composed of the two-thousand smallest companies in the broad Russell 3000 Index. Barchart Plus Members have 10 downloads per day, while Barchart Premier Members may download up to 100 .csv files per day. Pages are initially sorted in a specific order (depending on the data presented). You can re-sort the page by clicking on any of the column headings in the table.

Because of this, the Russell 2000 may sometimes track more than 2,000 stocks. The Russell 2000 is an important stock index because owning stocks of various sizes is a common way people diversify their investments. Other well-known indices, including the Dow Jones Industrial Average and the S&P 500, focus on large-cap stocks of well-established companies. But the Russell 2000 is a popular index for gauging returns on U.S. small-cap stocks. A stock market index shows how investors feel an economy is faring.

As of Oct. 31, 2023, the average value for a company on the Russell 2000 was $2.70 billion while the median market cap was $0.77 billion. The largest stock by market cap on the index was $12.63 billion. The Russell 2000 first traded above the 1,000 level on May 20, 2013. 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. Every year, FTSE Russell Group rebalances the Russell indexes.

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). 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.