Russell 3000 Index
Candlefocus EditorAs of 2021, the Russell 3000 Index includes 3,000 stocks, with a total market capitalization of $10.7 trillion. These stocks represent roughly 97% of all U.S.-incorporated equities, accounting for the major U.S. indices and their several versions. Large-cap stocks lead the Index’s performance, with the returns of other stocks being overlooked. Major sectors and industry groups in the index include communication, consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, utilities, and real estate.
The Russell 3000 Index is calculated daily from the latest market price and volume data of each security. It is reconstituted once a year, during which stocks that have the highest market capitalization over the previous year will be added to the index, and the stocks that have a lower market capitalization than originally thought are removed. This ensures that the Index continues to accurately represent the market.
The Russell 3000 Index serves as the basis for many market indexes, such as the popular Russell 1000 and Russell 2000. The Russell 3000 serves as a gauge of broad market performance, which is why most U.S.-based mutual funds use it to track market sentiment and allocate funds. This also makes the index an important tool for asset managers and investors, offering them insight on how their portfolios are performing compared to the broader market.
Overall, the Russell 3000 Index is one of the most reliable benchmarks for measuring the performance of U.S. stocks. It serves as the benchmark for many funds and other investments, and continues to be a major force in the stock market.