Russell Indexes

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The Russell Indexes (note that Russell uses "Indexes" rather than "Indices") are a set of stock market indices of listed U.S. companies. The main index is the Russell 3000 Index, which is divided into several sub-indexes. The list of stocks in the Russell 3000 is managed by the Russell Investment Group. Russell forms its indexes by listing all US companies in descending order by market capitalization. The top 3,000 stocks (those of the 3,000 largest companies) make up the broad Russell 3000 Index. The top 1,000 of those companies make up the large-cap Russell 1000 Index, and the bottom 2,000 (the smallest companies) make up the small-cap Russell 2000 Index. These are the most widely used of the Russell Indexes.

The indexes are rebalanced, or "reconstituted", once each year, on the last Friday in June. The reconstitution consists of updating the list of the largest 3,000 companies and assigning them to the appropriate indexes. Unlike the S&P 500 Index, the Russell indexes do not immediately replace a company that merges with another firm or has its stock delisted. This means that, for most of the year, the Russell 3000 Index has fewer than 3,000 companies in it. For instance, if a company from the index is delisted in July, that will be an empty spot in the index until the following June. The annual June rebalancing brings the total back up to 3,000. Due to the huge program trading volume needed to rebalance index funds, the day of the "reconstitution" is often one of the busiest trading days of the year in US equity markets.

Many investors use mutual funds or exchange-traded funds based on the Russell Indexes as a way of gaining exposure to certain portions of the US stock market. Additionally, many investment managers use the Russell Indexes as performance benchmarks to measure themselves against.

[edit] Complete list of Russell Indexes

Note that Russell publishes Value and Growth versions of each index, which divide the index roughly in half, separating companies classified as value investments from those classified as growth investments. Companies can appear in both the Value and Growth versions of an index, though the total number of shares between the Value and Growth versions will equal the number in the main index

  • Russell 3000 Index: The broad US stock market, including both large and small capitalization companies. Often compared to the Wilshire 5000 Index.
  • Russell 1000 Index: The large-cap index of the top 1,000 stocks in the Russell 3000 Index. Often compared to the S&P 500 Index.
  • Russell 2000 Index: The small-cap index of the bottom 2,000 stocks in the Russell 3000 Index.
  • Russell Top 200 Index: The mega-cap index of the very largest 200 stocks in the Russell 3000 Index.
  • Russell Midcap Index: The bottom 800 stocks in the Russell 1000 Index. The Russell Top 200 Index plus the Russell Midcap Index yields the Russell 1000 Index.
  • Russell 2500 Index: A mid- to small-cap index of the bottom 2,500 stocks in the Russell 3000 Index.
  • Russell Microcap Index: A micro-cap index of the stocks ranked from 2,001-4,000 in the Russell indexing universe, consisting of capitalizations ranging from $50M to $500M. Hence, this is an index of the 1,000 smallest Russell 2000 stocks, plus 1,000 smaller stocks.
  • Russell Small Cap Completeness Index: Similar to the Russell 2500 Index, these are the stocks from the Russell 3000 Index that do not appear in the S&P 500 Index. An investor wishing to use the Russell 3000 Index as a measure of exposure to the complete US stock market who wishes to use the S&P 500 Index rather than the Russell 1000 Index as a way of getting exposure to large-cap companies can combine the S&P 500 Index with the Russell Small Cap Completeness Index to get the Russell 3000 Index.

[edit] External links

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