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The Russell 2000 index is a stock market index that monitors the performance of 2,000 small-cap firms in the US. One of the most popular benchmarks for small-cap companies, it is maintained by the FTSE Russell, a division of the London Stock Exchange Group.
The index was initially released in 1984, and its calculation is based on the market capitalization of the companies that make up its components. The Russell 3000 index, which covers the 3,000 largest publicly traded corporations in the United States, is used to choose the index's companies. The Russell 3000 index's bottom 2,000 stocks are used for this purpose. The Russell 2000 is recreated every year in June, and its composition may alter as a result of changes in market capitalization or other causes.
Small-cap equities, which are typically thought of as being riskier and more volatile than large-cap stocks, are sometimes measured against the Russell 2000 index. Aside from traders who focus on small-cap companies, investment managers who build small-cap portfolios also utilize it as a foundation. The index is frequently contrasted with other benchmarks, such as the S&P 500 index, to evaluate the relative performance of small-cap stocks.
