Russell 2000

The Russell 2000 is a stock market index that measures the performance of 2,000 small-cap U.S. companies, representing the smallest segment of the broader Russell 3000 Index. Managed by FTSE Russell, the index is widely regarded as a benchmark for small-cap equity performance in the United States and is used by investors to gauge the health and trends of the small-cap sector.

The Russell 2000 includes companies across a broad range of industries but excludes large-cap and mega-cap firms, focusing instead on businesses with market capitalizations generally between $300 million and $2 billion. These companies tend to be more domestically focused, less mature, and more sensitive to economic cycles, which makes the index a useful barometer for the U.S. economy’s internal strength.

The Russell 2000 is commonly used by portfolio managers, analysts, and retail investors as a diversification tool, especially when aiming to gain exposure to higher-growth, higher-risk companies. It is also frequently referenced in economic analysis and used in the construction of small-cap mutual funds and ETFs, such as the iShares Russell 2000 ETF (IWM). Because small-cap stocks are often more volatile, the index can signal shifts in investor sentiment, risk appetite, and broader market momentum.