# Russell 2000 Index Definition and Key Metrics

![Russell 2000 Index](https://www.investopedia.com/thmb/qzioRB0Tes56dD68lT9_0QUMvCY=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Russel2000_Final-02adf698be214b599649d995bdc2eec1.jpg)

*Investopedia / Matthew Collins. — Investopedia / Matthew Collins*

## What Is the Russell 2000 Index?

The Russell 2000 Index, launched in 1984 by the Frank Russell Company and now managed by [FTSE Russell](https://www.investopedia.com/terms/f/ftse.asp), assesses the performance of 2,000 small-cap companies within the broader [Russell 3000 Index](https://www.investopedia.com/terms/r/russell_3000.asp). As a vital indicator of the U.S. economy, this index provides insights into the small-cap sector, representing approximately 7% of the Russell 3000’s total market capitalization. It is often favored by mutual fund investors for its comprehensive reflection of market opportunities in the small-cap segment.  

### Key Takeaways

*   The Russell 2000 Index is a prominent U.S. stock market index that tracks the performance of 2,000 smaller companies in the broader Russell 3000 Index, offering a comprehensive view of the small-cap sector.
*   Managed by FTSE Russell, the index is known for its focus on small-cap stocks and represents about 7% of the total Russell 3000 market capitalization.
*   As of March 31, 2024, the index's top three holdings were Super Micro Computer, Microstrategy, and Comfort Systems USA, with the highest weightings in industrials, healthcare, and financials sectors.
*   The average market cap of companies in the Russell 2000 was $4.82 billion, with the index first exceeding the 1,000 mark in 2013 and currently accessible through ETFs like the iShares Russell 2000.
*   The index is rebalanced annually every June, ensuring that it accurately reflects the performance of the smallest companies within the U.S. market.

## Comprehensive Overview of the Russell 2000 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)](https://www.investopedia.com/terms/l/lse.asp) Group. The index is composed of about 2,000 small-cap companies.

The index is the most widely quoted measure of the overall performance of small-cap to [mid-cap](https://www.investopedia.com/terms/m/midcapstock.asp) stocks. It represents approximately 7% of the total Russell 3000 [market capitalization](https://www.investopedia.com/terms/m/marketcapitalization.asp) 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.

As of March 31, 2024, the top three holdings in the index were Super Micro Computer ([SMCI](https://www.investopedia.com/markets/quote?tvwidgetsymbol=SMCI)), Microstrategy ([MSTR](https://www.investopedia.com/markets/quote?tvwidgetsymbol=MSTR)), and Comfort Systems USA ([FIX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=FIX)). The index is weighted most heavily in industrials, followed by healthcare and financials. The table below highlights a breakdown of the index by industry.

[Mutual fund](https://www.investopedia.com/terms/m/mutualfund.asp) investors prefer the Russell 2000 Index because it reflects broader [market](https://www.investopedia.com/terms/m/market.asp) opportunities and avoids biases or stock-specific risks that can affect a fund manager's performance. It's no surprise that many funds and [exchange-traded funds (ETFs)](https://www.investopedia.com/terms/e/etf.asp) mirror or are based on the Russell 2000.

> **Important**
>
> Many investors compare small-cap mutual funds' movements against the index's movement. That's because the index's movement is seen as a reflection of the opportunities in that entire sub-section of the market rather than narrower indices, which may contain biases or more stock-specific risks that can distort performance.

## Essential Metrics to Evaluate the Russell 2000 Index

As of March 31, 2024, the average [value](https://www.investopedia.com/terms/v/value.asp) for a company on the Russell 2000 was $4.82 billion, while the median market cap was $960 million. The largest stock by market cap on the index was $58.43 billion. The Russell 2000 first traded above 1,000 on May 20, 2013.

Two sub-indexes of the Russell 2000 have been created to track the performance of companies within it that contain unique characteristics that are desired by certain types of investors:

*   The Russell 2000 Growth Index measures the performance of Russell 2000 companies with higher price-to-value ratios and higher forecasted growth values.
*   The Russell 2000 Value Index measures the performance of Russell 2000 companies with lower [price-to-book (P/B) ratios](https://www.investopedia.com/terms/p/price-to-bookratio.asp) and lower forecasted growth values.

> **Fast Fact**
>
> 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.

## Unique Attributes of the Russell 2000 Index

The Russell 2000 uses both market cap and a stock’s presence on other indexes to determine its weighting, influenced by its sale price and tradable shares.

Unlike the S&P 500 and [Dow Jones Industrial Average (DJIA)](https://www.investopedia.com/terms/d/djia.asp), which track large-cap stocks, the Russell 2000 focuses on small-cap stocks.

Investors can mirror the index's returns by creating a similar [portfolio](https://www.investopedia.com/terms/p/portfolio.asp), but it’s easier to use index futures, [index-based mutual funds](https://www.investopedia.com/ask/answers/041015/what-are-some-best-small-cap-index-funds.asp), or ETFs like the iShares Russell 2000 ([IWM](https://www.investopedia.com/markets/quote?tvwidgetsymbol=IWM)), which is highly traded.  

## What Does the Russell 2000 Indicate?

The Russell 2000 Index is a measure of the performance of 2,000 publicly traded small-cap U.S. companies.

## What Is the Russell 2000 Methodology?

The Russell 2000 weighs U.S. small capitalization stocks using a float-adjusted market capitalization approach.

## What's the Highest the Russel 2000 Has Ever Been?

The Russell 2000 reached a high of 2,458 on Nov. 7, 2021.

## The Bottom Line

The Russell 2000 is an index of 2,000 small-cap companies that was first launched in 1984. It is widely used as a benchmark for U.S. small-cap stocks. The index comprises 2,000 of the 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 companies are added, deleted, or kept.

> **Article Sources**
>
> 1.  FTSE Russell. "[All Index Factsheets](https://www.lseg.com/en/ftse-russell/index-resources/factsheets)." Search for Russell 2000, click on link, download factsheet.
>     
> 2.  FTSE Russell. "[All Index Factsheets](https://www.lseg.com/en/ftse-russell/index-resources/factsheets)." Search for Russell 3000, click on link, download factsheet.
>     
> 3.  TradingView. "[RUT](https://www.tradingview.com/chart/GkpeDcf4/?symbol=TVC%3ARUT)."
>     
> 4.  FTSE Russell. "[All Index Factsheets](https://www.lseg.com/en/ftse-russell/index-resources/factsheets)." Search for Russell 2000 Growth, click on link, download factsheet.
>     
> 5.  FTSE Russell. "[All Index Factsheets](https://www.lseg.com/en/ftse-russell/index-resources/factsheets)." Search for Russell 2000 Value, click on link, download factsheet.
>     
> 6.  FTSE Russell. "[All Index Factsheets](https://www.lseg.com/en/ftse-russell/index-resources/factsheets)." Search for Russell Microcap, click on link, download factsheet.
>     
> 7.  TradingView. "[RUT](https://www.tradingview.com/symbols/TVC-RUT/)."