What Is the Russell 2000 Stock Market Index?

What is the Russell 2000 index?

The Russell 2000 index, sometimes abbreviated Russell 2K, is the most widely used index of small-cap stocks, or those with a relatively small market capitalization. There are no hard-and-fast rules for when a stock is a small cap.

The key point here is that there's a broad market index known as the Russell 3000. It is divided into two smaller ones: the Russell 1000, which accounts for the 1,000 largest companies, and the Russell 2000, which accounts for the remaining two-thirds.

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.

The Russell 2000 is a market cap-weighted index, as are the majority of popular stock indexes -- the Dow Jones Industrial Average being the main exception. This means that the 2,000 companies that comprise the index don't contribute equally to its performance. Larger companies have a proportionally greater impact than smaller ones.

How does the Russell 2000 index work?

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.

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.

As an example, GameStop (NYSE:GME) 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.

Notably, one of the companies that departed the Russell 2000 during the 2024 reconstitution is Super Micro Computer (NASDAQ:SMCI). The stock left behind some big shoes to fill as it made its way into the Russell 1000 as the largest company by weight.

How is the Russell 2000 different from other major stock indexes?

There are many important stock indexes, and all focus on a different basket of stocks. Here are some of the most common:

• Dow Jones Industrial Average: The Dow, the best-known stock index in the U.S., includes 30 of the largest publicly traded companies. Unlike most indexes, the Dow is price-weighted, meaning stocks with higher share prices contribute more to the index's performance.
• S&P 500: This one includes 500 large public U.S. companies. Note that they aren't necessarily the largest 500.
• S&P MidCap 400: This index comprises 400 public U.S. companies with market capitalizations between $201 million and $27.7 billion.
• S&P SmallCap 600: This index includes 600 public U.S. companies with market capitalizations of between $17 million and $12 billion. The S&P 500, S&P MidCap 400, and S&P SmallCap 600 are collectively known as the S&P Composite 1500 index.
• Nasdaq Composite: This index includes all the companies traded on the Nasdaq exchange.
• Nasdaq-100: The Nasdaq-100 index includes 100 of the largest Nasdaq-listed companies and is widely considered a barometer for tech stocks' performances.
• Russell 1000: This comprises the 1,000 largest public U.S. companies. The Russell 1000 and Russell 2000 are collectively known as the Russell 3000, regarded as one of the best barometers for the overall U.S. stock market's performance.

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.

Russell 2000 companies list

It wouldn't be practical to list all 2,000 companies here. Instead, here are 10 of the largest Russell 2000 companies, just to give you an idea of the types of companies that make up the index.

1. Sprouts Farmers Market (NASDAQ:SFM)
2. Insmed (NASDAQ:INSM)
3. FTAI Aviation (NASDAQ:FTAI)
4. Carpenter Technology (NYSE:CRS)
5. Hims & Hers Health (NYSE:HIMS)
6. Applied Industrial Technologies (NYSE:AIT)
7. Mueller Industries (NYSE:MLI)
8. Credo Technology Group (NASDAQ:CRDO)
9. HealthEquity (NASDAQ:HQY)
10. SouthState (NYSE:SSB)

Data source: Vanguard. Data current as of May 31, 2025.

The takeaway is that while these aren't exactly tiny enterprises, they aren't giant companies either. That's the key difference between the Russell 2000 and the "headline" indexes.

Russell 2000 by industry

Small-cap subindexes in the Russell 2000

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.

Conversely, the Russell 2000 value index comprises hundreds of value stocks from the index. It's also worth noting that many Russell 2000 stocks are included in both subindexes. As of May 2025, 1,423 stocks were in the Vanguard Russell 2000 Value ETF (NASDAQ:VTWV) and 1,125 in the Vanguard Russell 2000 Growth ETF (NASDAQ:VTWG).

How to invest in the Russell 2000 index fund

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.

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