Russell 3000 Index
What it is:
Started in 1984, the Russell 3000 Index attempts to capture the return of the overall market.
The index can be subdivided into two segments: the Russell 1000 (consisting of the 1000 largest market-cap companies) and Russell 2000 (consisting of 2000 small-cap companies).
How it works (Example):
The U.S.-based requirement disqualifies many large international firms from inclusion into the index--names such as Unilever, Schlumberger and Seagrams, just to name a few. The components of the Russell 3000 Index account for roughly 98% of the total value of all equity traded on U.S. exchanges, making this a very broad indeed. The is market-cap weighted, so the largest firms have the biggest impact on the 's value.
Why it Matters:
This stocks. The more stringent requirements for inclusion also probably make it a better representation of the universe of actively traded stocks when compared to the Wilshire 5000.captures virtually the entire return posted by U.S.-based
Most investors consider the Wilshire 5000 to be the market returns. Even if it includes stocks that are almost impossible to trade, that contains more equities and thus gets more focus. Although the Russell 3000 gets little attention, its two subsets, the 1000 and 2000, are widely followed.for total
After noticing that large indices consistently lag behind smaller, more focused ones, many investors are beginning to wonder if there is such a thing as "too much". Is it only a matter of time before someone launches a "world " that contains all equities traded in every country and renders other total market indices obsolete?