Russell 2500 Index Definition

What Is the Russell 2500 Index?

The Russell 2500 is a market-cap-weighted index that includes the smallest 2,500 companies covered inside the broad-based Russell 3000 sphere of United States-based listed equities. All 2,500 of the companies built-in inside the Index cover the small- and mid-cap market capitalizations.

Understanding the Russell 2500 Index

The Russell 2500 Index is designed to be in depth and unbiased in its inclusion requirements, and it is recompiled once a year to account for the inevitable changes that occur as stocks upward thrust and fall in price. The gap covered by the use of the blending of small- and mid-cap stocks are from time to time referred to as “smid” cap; it should describe any company up to the $10 billion market cap range. The ones companies are maximum incessantly considered to be further growth-oriented than large-cap stocks and may revel in further volatility than the latter over long-term classes.

How Companies Are Decided on for Inclusion inside the Russell 2500

Presented on July 1, 1995, companies determined on for inclusion in the Russell 2500 Index are decided on in keeping with float-adjusted market capitalization. On the remaining purchasing and promoting day of Would in all probability of each and every year, FSTE Russell ranks eligible companies in keeping with their normal market capitalization values, and on the remaining Friday of June of each and every year, the index is reconstituted. To be eligible for inclusion inside the Russell 2500 Index, a protection will have to industry on the NYSE, NYSE American, NASDAQ, or ARCA exchanges. The index is monitored by way of the ticker symbol R25I.

The Russell 2500 Index comprises kind of 2,500 of the smallest securities, in keeping with a combination of their market cap and provide index membership. Companies built-in in the index maximum frequently come from financial services and products, producer durables, and client discretionary industries. The phase companies and the industry composition of the index are topic to change through the years.

Investing inside the Russell 2500 Index

Those who wish to spend money on the entire potency of the Russell 2500 Index may spend money on the iShares Russell Small/Mid-Cap Index Fund, which seeks to track the potency of the Russell 2500 Index.

BlackRock uses a expert sampling indexing strategy to arrange the Fund. Advisor sampling is an indexing methodology that seeks to spend money on a marketing consultant trend of securities that mimics the investment profile of the underlying Russell 2500 Index. The fund maximum incessantly invests no less than 90% of its belongings inside the securities of the underlying index. The securities determined on are expected to have, inside the aggregate, investment characteristics (in keeping with parts very similar to market capitalization and industry weightings), fundamental characteristics (very similar to return variability and yield), and liquidity measures similar to those of the underlying index. The fund may or may not snatch the entire securities inside the underlying index.

Other Russell Indices

FTSE Russell maintains quite a few other not unusual indices, at the side of the following:

• Russell 3000: The index tracks the potency of the 3,000 greatest U.S.-traded stocks which represent about 98% of all U.S integrated equity securities.  
• Russell 3000 Value: Integrated inside the Russell 3000 Value Index are stocks from the Russell 3000 Index with lower price-to-book ratios and reduce expected growth fees.
• Russell 3000 Growth: comprises companies that display signs of above-average growth. The index is used to offer a gauge of the potency of growth stocks in america.
• Russell 2000: measuring the potency of kind of 2,000 smallest-cap American companies inside the Russell 3000 Index.
• Russell 1000: a subset of the Russell 3000 Index, represents the 1000 best possible companies by the use of market capitalization in america.
• Russell Top 200: an index of the largest 200 companies inside the Russell 3000 index. 
• Russell Top 50: index of the 50 greatest stocks inside the Russell 3000 universe of U.S.-based equities.