what is the russell 2000 index 
the russell 2000 index is 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 widely regarded as a bellwether of the u s economy because of its focus on smaller companies in the u s market understanding the russell 2000 indexthe 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 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 stocks it represents approximately 7 of the total russell 3000 market capitalization 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 ftse russel s index factsheet dated march 31 2024 the index s top three holdings were super micro computer smci microstrategy mstr and comfort systems usa fix it is highest weighted in industrials followed by healthcare then financials the table below highlights a breakdown of the index by industry mutual fund investors favor the russell 2000 index because it reflects the investment opportunity presented by the entire market rather than opportunities offered by narrower indices which may contain bias or more stock specific risk that can distort a fund manager s performance it s no surprise that many funds and exchange traded funds etfs mirror or are based on the russell 2000 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 key metrics of the russell 2000 indexas of march 31 2024 the average value 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 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 special considerationsthe russell 2000 index is weighted using a combination of market cap and the other indexes a stock is listed on this means that a member stock s last sale price the number of shares that can be traded and whether it is on other indexes influence its listing on the index the other big difference between the russell 2000 and other major indices is that it tracks small cap stocks the s p 500 and dow jones industrial average djia indices on the other hand track large cap stocks the index s returns can be replicated by investors who take the trouble to create a sizeable and complex portfolio that mirrors the index however there are far easier ways to get the same returns for instance investors can use index futures or index based mutual funds that track the russell 2000 the most popular option is an etf the most heavily traded of the etfs is the ishares russell 2000 index etf iwm 