# Russell 3000 Index: Stocks and Limitations

![Russell 3000 Index: A measure of the performance of the largest 3,000 U.S. companies.](https://www.investopedia.com/thmb/rvoYp1dLV9GHpV9xhQsxtHoAosU=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Russell_3000_final-90f779a1f35548279c01404edfae5561.png)

*The Russell 3000 offers a broad, stable view of the market and is updated annually to include new and growing stocks. — Michela Buttignol / Investopedia*

> **Definition**
>
> The Russell 3000 Index is a stock market index that tracks the performance of the 3,000 largest publicly traded companies in the United States, representing about 98% of the investable U.S. stock market.

The Russell 3000 Index, part of the [FTSE Russell](https://www.investopedia.com/terms/f/ftse.asp), started on Jan. 1, 1984, and tracks the performance of the largest 3,000 U.S. companies, covering about 98% of the investable U.S. equity market.

The Russell 3000 was the foundation for the Russell 1000, a large-cap index, and the Russell 2000, a small-cap index.

The Russell 3000 provides a broad market [barometer](https://www.investopedia.com/terms/b/barometer.asp). It is reconstituted every year in June to reflect the evolving U.S. equity market.

Large-cap stocks have a significant influence on the Russell 3000. The index also has diverse sector representation, including technology and healthcare.

### Key Takeaways

*   The Russell 3000 Index tracks the performance of the largest 3,000 U.S. companies, representing 98% of the investable equity market.
*   It serves as the foundation for the large-cap Russell 1000 Index and small-cap Russell 2000 Index.
*   The index is reconstituted annually to reflect changes in the U.S. equity market.
*   Investors can't buy the index directly but can invest through ETFs or index funds that mimic its performance.
*   Large-cap stocks significantly influence the index, often overshadowing smaller segments.

## Understanding the Russell 3000 Index

The Russell 3000 Index serves as the basis for the large-cap [Russell 1000](https://www.investopedia.com/terms/r/russell_1000index.asp) and the small-cap [Russell 2000](https://www.investopedia.com/terms/r/russell2000.asp) indexes. The top 1,000 stocks form the Russell 1000, and the smallest 2,000 make up the Russell 2000.

The Russell 3000 Index offers a broad, stable view of the market and is updated annually to include new and growing stocks. Financial, consumer discretionary, healthcare, and technology stocks make up a large part of the index.

> **Important**
>
> As of September 2025, the average market capitalization of Russell 3000 stock holdings was $1.104 trillion. The index has 2,974 holdings.

## Key Holdings in the Russell 3000 Index

## Understanding the Russell 3000 Index Reconstitution Process

The Russell U.S. Indexes are designed to reflect the [ever-changing U.S. equity market](https://www.investopedia.com/articles/stock-analysis/062516/russell-rebalance-study-what-you-need-know.asp), and the annual [reconstitution](https://www.investopedia.com/terms/r/reconstitution.asp) process is critical to maintaining accurate representation. When the indexes are reconstituted, the breakpoints among large-cap, midcap, and small-cap stocks are redefined to ensure market changes that have occurred in the preceding year are captured.

Companies are evaluated to determine where they lie along the investment spectrum from [value to growth](https://www.investopedia.com/articles/professionals/072415/value-or-growth-stocks-which-best.asp). Companies will be added to, removed, or swapped among the Russell 3000, 2000, and 1000. Stocks in the Russell 3000 index are reconstituted once a year, on the last Friday in June.

## How to Invest in the Russell 3000 Index

You can't invest directly in the FTSE Russell Group, but you can buy individual stocks in the Russell 3000. Many financial institutions also offer [exchange-traded funds (ETFs)](https://www.investopedia.com/terms/e/etf.asp) or [index funds](https://www.investopedia.com/terms/i/indexfund.asp) that track the Russell 3000's performance.  

## Comparing the Russell 3000 Index to Other Major Indexes

The [S&P 500](https://www.investopedia.com/terms/s/sp500.asp) Index tracks the largest 500 publicly traded companies, with exposure to 80% of U.S. stocks, compared to the Russell 3000’s 98%. The [Dow Jones Industrial Average (DJIA)](https://www.investopedia.com/terms/d/djia.asp) measures the performance of 30 large companies covering all sectors except transportation and utilities.

The [Nasdaq Composite Index](https://www.investopedia.com/terms/n/nasdaqcompositeindex.asp) includes only stocks listed on the Nasdaq, totaling over 3,000. This gives it wider exposure than the S&P 500 or DJIA, though it focuses heavily on technology.  

> **Tip**
>
> The Russell 3000 Index reached an all-time record close of 3,819.11 on Oct. 1, 2025.

## Challenges and Limitations of the Russell 3000 Index

*   Large-cap stocks direct a majority of the index’s performance, and the returns of other segments are overlooked.
*   It limits an investor's portfolio to domestic stocks without investment in other assets.
*   The index data is only updated quarterly or annually.

## Can Individuals Invest Directly in an Index?

Investors cannot invest directly in a stock index, such as the Russell 3000 or the S&P 500, but can invest in an index fund or ETF that tracks the performance of the target index.

## How Are Stocks Evaluated for Inclusion in the Russell 3000?

FTSE Russell calculates the total market capitalization of each stock to determine whether it is large enough to be included in the Russell indexes. Total market capitalization is determined by multiplying total outstanding shares by the market price as of the rank day for stocks considered at annual reconstitution.

## What Is an Index Fund?

An index fund is a type of mutual fund or ETF with a portfolio constructed to track the components of a financial market index, such as the Russell 3000.  

## The Bottom Line

The Russell 3000 Index is comprehensive in scope, including approximately 98% of the U.S. equity market, thus providing wide market representation.

Large-cap stocks have a strong influence on the index's performance, which might overshadow the impact of smaller-cap stocks.

The Russell 3000 serves as a foundation for the Russell 1000 and Russell 2000 indexes, which cater to large-cap and small-cap investor interests, respectively.

Every year in June, the Russell 3000 undergoes a reconstitution process to keep the index up to date, reflecting market changes.

Since you can't invest directly in the Russell 3000, consider ETFs and index funds that track the performance of the index.

The Russell 3000 has limitations, such as the index's domestic focus vs. other assets and infrequent data updates (only quarterly or annually).

> **Article Sources**
>
> 1.  FTSE Russell. "[Russell 3000 Index Factsheet](https://research.ftserussell.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=US3000USD&isManual=True)." Page 1. Download required.
>     
> 2.  FTSE Russell. “[Russell 1000 Index Factsheet](https://research.ftserussell.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=US1000USD&isManual=True)." Page 1. Download required.
>     
> 3.  FTSE Russell. "[Russell 2000 Index Factsheet](https://research.ftserussell.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=US2000USD&isManual=True)." Page 1. Download required.
>     
> 4.  FTSE Russell. "[Construction and Methodology](https://research.ftserussell.com/products/downloads/Russell-US-indexes.pdf)." Page 11.
>     
> 5.  S&P Global. "[S&P 500®](https://www.spglobal.com/spdji/en/indices/equity/sp-500/#overview)."
>     
> 6.  S&P Global. "[Dow Jones Industrial Average®](https://www.spglobal.com/spdji/en/indices/equity/dow-jones-industrial-average/#overview)."
>     
> 7.  Nasdaq. "[Nasdaq Composite Factsheet](https://indexes.nasdaqomx.com/docs/FS_COMP.pdf)." Page 1.
>     
> 8.  Yahoo! Finance. "[Russell 3000 Price History](https://finance.yahoo.com/quote/%5ERUA/history/)."
>     
> 9.  FTSE Russell. "[Construction and Methodology](https://research.ftserussell.com/products/downloads/Russell-US-indexes.pdf)." Page 19.