Investing in the Russell 2000 is a great way to get exposure to the exciting world of small-cap investing without relying too heavily on the performance of any single company. The vast diversification of the index should help to smooth out the volatile nature of investing in smaller stocks while maintaining the potential for market-beating performance. The Russell 2000 weighs U.S. small capitalization stocks using a float-adjusted market capitalization approach. As 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.
- As an example, GameStop (GME -4.11%) was added to the Russell 1000 in the 2021 reconstitution and removed from the Russell 2000 after its price soared in the meme stock craze.
- To keep up to date on these stocks, the Russell 2000 is reconstituted annually to ensure that the companies in it represent the small-cap universe.
- There are no hard-and-fast rules for when a stock is a small cap.
- We can predict a longer-term price target by taking a bars pattern from the index’s trending move between October 2023 to March this year and overlay it on the chart from the April swing low.
- The Russell 2000 weighs U.S. small capitalization stocks using a float-adjusted market capitalization approach.
The largest stock by market cap on the index was $58.43 billion. If you want to invest in the Russell 2000 index, you don’t need to buy all 2,000 stocks. You can invest in the index rather easily through a mutual fund or exchange-traded fund (ETF) designed to track it passively. In a nutshell, the Russell 2000 comprises smaller and more volatile stocks than those in large-cap indexes. However, the large number of companies in the index helps mitigate risk since it’s less reliant on any particular stock’s performance.
Company Overview
She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies. Below, we take a closer look at the Russell 2000 chart and use technical analysis to identify important levels to watch out for. The Russell 2000 index hit an all-time high of 2,466.49 on Nov. 25, 2024, but closed out the daily trading session below that level. Meanwhile, the index’s highest ever daily closing price stands at 2,442.74 and was achieved on Nov. 8, 2021. The Russell 2000 index had recorded an annual average total return of 6.7% over the 10-year period through June 15, 2025.
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 heavily traded of the ETFs is the iShares Russell 2000 index ETF (IWM). The 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 Dow Jones Industrial Average is a stock index that tracks 30 of the largest U.S. companies.
Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). 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 Russell 2000 Index is a stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index.
Market Cap
Notably, one of the companies that departed the Russell 2000 during the 2024 reconstitution is Super Micro Computer (SMCI -2.94%). The stock left behind some big shoes client sentiment to fill as it made its way into the Russell 1000 as the largest company by weight. The Russell 2000 is designed to provide the best indicator of the performance of small-cap U.S. stocks. To keep up to date on these stocks, the Russell 2000 is reconstituted annually to ensure that the companies in it represent the small-cap universe. This tool will download a .csv file for the View being displayed.
- Although designed as a barometer of small-cap stocks, some subindexes comprise stocks in the Russell 2000.
- The most heavily traded of the ETFs is the iShares Russell 2000 index ETF (IWM).
- 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.
- Scroll through widgets of the different content available for the symbol.
- Meanwhile, the index’s highest ever daily closing price stands at 2,442.74 and was achieved on Nov. 8, 2021.
- Take advantage of Mr. Market by checking out our Top 6 Stocks for this week.
Indices
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. Although designed as a barometer of small-cap stocks, some subindexes comprise stocks in the Russell 2000. For example, the Russell 2000 growth index is designed to gauge how small-cap growth stocks are performing. About 1,100 stocks out of the broader Russell 2000 qualify for the growth subindex, with the technology and healthcare sectors making up the largest contributions. This is to be expected since the average includes data from the previous, lower priced days. As long as prices remain above the average there is strength in the market.
What are stock market indexes?
In simple terms, if a company grows too large, it will be removed from the Russell 2000. In turn, it will likely be placed in the Russell 1000, which is designed to be a barometer of large-cap stocks’ performances. The largest company in the Russell 2000 has a market cap of roughly $107 billion; the average market cap of companies in the index is roughly $4.5 billion. Unique to Barchart.com, data tables contain an option that allows you to see more data for the symbol without leaving the page.
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Investing in the iShares Russell 2000 ETF offers exposure to U.S. small-cap stocks. As an example, GameStop (GME -4.11%) was added to the Russell 1000 in the 2021 reconstitution and removed from the Russell 2000 after its price soared in the meme stock craze. In all, 38 companies were added to the Russell 1000 in June 2024, with 27 moving from the Russell 2000. A fund that invests in the companies in the S&P 500 can be a great way to start a portfolio and invest for the long term.
Russell 2000 Ishares ETF (IWM)
Please bear with us as we address this and restore your personalized lists. The Russell 2000 Index is a measure of the performance of 2,000 publicly traded small-cap U.S. companies. We can predict a longer-term price target by taking a bars pattern from the index’s trending move between October 2023 to March this year and overlay it on the chart from the April swing low. The index would likely encounter significant resistance near this level as it also sits less than 2% above the Russell’s record high at 2,459 set in November 2021. In this case, we add 215 to 2,080, which projects a target of 2,295.
The Nasdaq has historically delivered a high return on investment. Check out some straightforward investing options in this list. If you want exposure to hundreds of small-cap stocks, the easiest way is with a Russell 2000 ETF.