Russell 2000: Investing in 2000 Small-Cap Companies
The Russell 2000 represents an index of “Small-Cap” companies in the US. It tracks companies ranked 1,000 to 3,000 by market cap in the US Stock Markets!
What are the Russell 2000 Companies?
The Russell 3000 tracks the top 3,000 stocks in the US, and the Russell 2,000 tracks companies ranked 1,000 to 3,000. The Russell 2000 is used to track “Small-Cap” companies with median market cap is $922 million. Investors use this to diversity from the DJIA or S&P500. Top companies include Caesars (CZR), Plug Power (PLUG), Novavax (NVAX), Gamestop (GME), UpWork(UPWK).
Industry Diversification
The Russell 2000 is well diversified by Industry. Finance = 26%. Industrials = 19%. Healthcare = 15%. Technology is only 10% which is much less than the S&P500.
Performance
The Russell 2000 has increased 84.6% from 1,219 in 07/2016 to 2,252 today 7/2021.
The Russell 2000 compared to the S&P 500 returns is below. The Russell 2000 in light blue has underperformed from 1980-2000. Russell 2000 has occasionally outperformed since 2000-2021.
How to Invest!!
There are 2 excellent Exchange Traded Funds that track Russell 2000 Companies: VTWO (Vanguard), IWM (BlackRock). Both have affordable fees for under 0.20%. Here’s a screenshot of both:
VTWO
Vanguard 0.10% Fee https://investor.vanguard.com/etf/profile/VOO
IWM
Blackrock 0.19% Fee https://www.ishares.com/us/products/239710/ishares-russell-2000-etf
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