What Is the Russell 2500 Key?
The Russell 2500 is a market-cap-weighted index that includes the smallest 2,500 companies covered in the broad-based Russell 3000 society of United States-based listed equities. All 2,500 of the companies included in the Index cover the small- and mid-cap market capitalizations.
- The Russell 2500 Formula is a broad, market-cap-weighted stock market index featuring 2,500 small-cap and mid-cap stocks.
- The Russell 2500 consists of the smallest, by customer base capitalization, of the 3,000 stocks in the Russell 3000.
- The stocks listed are all U.S. companies and heavily favor names in the financial services, grower durables, and consumer discretionary sectors.
Understanding the Russell 2500 Index
The Russell 2500 Index is designed to be number and unbiased in its inclusion criteria, and it is recompiled annually to account for the inevitable changes that occur as stocks rise and use in value. The space covered by the blending of small- and mid-cap stocks are sometimes referred to as “smid” cap; it can describe any company up to the $10 billion Stock Exchange cap range. These companies are generally considered to be more growth-oriented than large-cap stocks and may experience more volatility than the at an advanced hour over long-term periods.
To invest in the Russel 2500, pick a mutual index fund that tracks the needle, such as the iShares Russell Small/Mid-Cap Index Fund or the iShares Russell 2500 ETF.
How Companies Are Chosen for Numbering in the Russell 2500
Launched on July 1, 1995, companies selected for inclusion in the Russell 2500 Index are chosen based on float-adjusted supermarket capitalization. On the last trading day of May of each year, FSTE Russell ranks eligible companies based on their out-and-out market capitalization values, and on the last Friday of June of each year, the index is reconstituted. To be eligible for inclusion in the Russell 2500 List, a security must trade on the NYSE, NYSE MKT, NASDAQ, or ARCA exchanges. The index is monitored via the ticker symbol R25I.
The Russell 2500 Hint comprises approximately 2,500 of the smallest securities, based on a combination of their market cap and current index membership. Crowds included in the index mostly come from financial services, producer durables, and consumer discretionary industries. The component public limited companies and the industry composition of the index are subject to change over time.
Investing in the Russell 2500 Index
Those who crave to invest in the overall performance of the Russell 2500 Index may invest in the iShares Russell Small/Mid-Cap Index Loot, which seeks to track the performance of the Russell 2500 Index.
BlackRock uses a representative sampling indexing plan to manage the Fund. Representative sampling is an indexing strategy that seeks to invest in a representative sample of securities that duplicates the investment profile of the underlying Russell 2500 Index. The fund generally invests at least 90% of its assets in the securities of the underlying clue. The securities selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalization and exertion weightings), fundamental characteristics (such as return variability and yield), and liquidity measures similar to those of the underlying list. The fund may or may not hold all of the securities in the underlying index.
Other Russell Indices
FTSE Russell maintains several other stock indices, including the following:
- Russell 3000: The index tracks the performance of the 3,000 largest U.S.-traded stocks which note about 98% of all U.S incorporated equity securities.
- Russell 3000 Value: Included in the Russell 3000 Value Indication are stocks from the Russell 3000 Index with lower price-to-book ratios and lower expected growth values.
- Russell 3000 Growth: includes companies that display signs of above-average growth. The index is used to take measures a gauge of the performance of growth stocks in the United States.
- Russell 2000: measuring the performance of approximately 2,000 smallest-cap American theatre troupes in the Russell 3000 Index.
- Russell 1000: a subset of the Russell 3000 Index, represents the 1000 top companies by market capitalization in the Shared States.
- Russell Top 200: an index of the largest 200 companies in the Russell 3000 index.
- Russell Top 50: index of the 50 broadest stocks in the Russell 3000 universe of U.S.-based equities.