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Russell 2000

Heavy in Technology with High Growth Potential and Some Risks

The Russell 2000 is an index of selected companies that is intended to be a representative measure the performance of the "small cap" sector of the the overall market of US stocks. It is a sub index of the wider Russell 3000 that consists of a weighted average of the stock prices of 2000 representative small US companies. Thus it is widely used as indicative of the general performance of small-cap to mid-cap companies. Russell Indexes Almost 10% of the entire market capitalization in the Russell 3000 Index represents the index. The index’s average capitalization on market is $520 million with a norm capital in the market of $410 million. It is the standard for which many mutual funds use to represent the small cap market. This specific index comes from a global family of indices in the United States. It functions to notice and watch out for investments in the overall market target caps. The Russell 2000 is only a sub component of the larger general index which is the Russell 3000 index.

Russell 2000 Sectors Weighting

  • Financials                           21%

  • Information Technology     18%

  • Health Care                        15%

  • Consumer Discretionary   15%

  • Industrials                            14%

  • Energy                                   6%

  • Materials                               4%

  • Consumer Staples               3%

  • Utilities                                   2%

  • Telecommunications            1%

  • The companies are listed and arranged in terms of the capitalization of the various included companies. The committee behind the index sees to it that all actions are seen transparently to maintain a consistant overall market representation. The procedures established are to assure the strict following of the index established rules so that the index consistanly is reflecteive of the overall markets in the target cap stocks. The Russell index 2000 comes from a broad spectrum of indices whose goal is to monitor the behavior of the market and the performances of the companies. It manages to do rebalancing annually every June. This rebalancing is more known as reconstitution. In this financial measure, stock are reviewed and reconsidered. Moreover, the list of the index is updated and reviewed. With this review, companies are evaluated if they are able to meet and maintain the standards of the index. Some companies are taken out from the list when rebalancing is done however, unlike other indices; the Russell 2000 considers company mergers and are evaluated before delisting the company. The merged companies are evaluated if they are still capable and worthy of the position. As long as the merged companies still pass certain standards, they are still considered to continue to be included.


    The Russell Indexes are based on market value and further divided into sectors.

    From the different Russell family of indices, specific indexes are focused on a different measures in growth and value. Companies are classified according to their worth as it is ranked in different Russell indices versions. A company may belong to 2 kinds of Russell indices as long as it passes the standards and requirements. The Russell 2000 is made up of the smallest companies in the bottom 2000 while the top 1000 makes up the Russell 1000 and thus completing the whole Russell 3000. The Russell 2000 is the small cap and the Russell 1000 is considered to be the large cap. These two are broken down according to style and the capitalization of the market. The companies that made up the Russell 2000 index are varied from different sectors and aspects of the market. Though it is true that any company may belong to this list given that the company is able to meet the standards and maintain them, there are five sectors in the business world that most of the companies in the list come from. The five sectors are consumer discretionary companies, financial services companies, health care companies, product durable companies and technology-related companies. There exist numerous financial instruments that allow you to invest in the entire family of Russell Indexes. Listed below are just some of the ETF's used as investment vehicles to track the performance of the Russell 1000, 2000 and 3000 listed companies.

    How to Invest in the Russell 1000 Index:

    ETF Name-Link Provider Exchange Symbol
    iShares Russell 1000 Index Fund iShares NYSEArca IWB
    ETFS Russe 1000 Fund
    ETF Securities NYSE Euronext RONE
    ETFS Russell 1000 Fund ETF Securities Ireland Stock Exchange ETLK
    ETFS Russell 1000 Fund ETF Securities London Stock Exchange RONE
    ETFS Russell 1000 Fund ETF Securities Deutsche Börse ETLY
    Easy ETF Russell 1000 (USD) EasyETF Euronext Paris ERD
    Large Cap Bull 3x Shares Direxionshares NYSEArca BGU
    Large Cap Bear 3x Shares Direxionshares NYSEArca BGZ
    Vanguard Russell 1000 Index Vanguard NASDAQ VONE

    How to Invest in the Russell 2000 Index:

    ETF name Provider Exchange Symbol
    iShares Russell 2000 Index Fund iShares NYSEArca IWM
    ETFS Russell 2000 Fund ETF Securities NYSE Euronext RTWO
    ProShares Short Russell2000 ProShares NYSEArca RWM
    ProShares Ultra Russell2000 ProShares NYSEArca UWM
    ProShares UltraShort Russell2000 ProShares NYSEArca TWM
    Small Cap Bull 3x Shares Direxionshares NYSEArca TNA
    Small Cap Bear 3x Shares Direxionshares NYSEArca TZA
    Canadian Dollar Hedged Index Fund iShares Toronto Stock Exchange XSU
    Vanguard Russell 2000 Index Vanguard NASDAQ VTWO
    db x-trackers Russell 2000 ETF db x-trackers Xetra DXS2
    db x-trackers Russell 2000 ETF db x-trackers London Stock Exchange XRU2
    db x-trackers Russell 2000 ETF db x-trackers Euronext Paris XRU