What is the Russell 1000 Index?

Introduction

The Russell 1000 Index is probably the most widely followed stock market index, along with the S&P 500 Index. To be eligible a stock must be:

There are now hundreds of companies that prepare stock market indexes, but FTSE/Russell is one of the four companies that dominate the index industry, along with MSCI, S&P, and NASDAQ. You can get a pretty good gauge of the index industry by looking at the number of exchange traded funds that are tracking indexes from particular index providers - see list of index providers for ETFs.

GISC sectors

Let's look at the current breakout of the Russell 1000 Index by GICS sector:

Russell 1000Total market
GISC Sector# of StocksMarket cap% # of StocksMarket cap%
Communication Services56$4,846,858,663,56013.6%170$4,992,112,591,04912.7%
Consumer Discretionary114$4,414,668,731,03512.4%453$4,861,714,338,99212.4%
Consumer Staples55$2,481,995,448,9966.9%161$2,645,049,019,1466.7%
Energy35$620,433,091,4151.7%206$683,756,096,4531.7%
Financials145$3,392,091,611,6909.5%933$4,396,009,762,08511.2%
Health Care124$4,656,395,907,13013.0%944$5,258,451,742,75813.4%
Industrials142$2,907,534,665,8968.1%519$3,265,197,433,7728.3%
Information Technology174$9,525,938,792,20326.7%570$9,935,907,610,22525.3%
Materials53$908,463,583,5492.5%177$942,585,443,8182.4%
Real Estate77$1,049,715,249,0542.9%226$1,210,236,718,1583.1%
Utilities38$909,235,162,6572.5%77$993,193,321,2252.5%
Total1,013$35,713,330,907,185100% 4,632$39,265,570,522,656100%

When we say "total market" in this article, we are talking about all common stocks, REITs and mortgage REITs of U.S. companies that trade on the U.S. stock market. So that excludes MLPs, preferred stocks, ADRs, and investment funds, and the common stocks of non-US companies that trade on the U.S. stock market. In terms of market capitalization, the Russell 1000 currently captures 91.0% of the total market.

Let's compare the S&P 500 Index to the Russell 1000 Index:

S&P 500Russell 1000
GISC Sector# of StocksMarket cap% # of StocksMarket cap%
Communication Services26$4,414,798,515,60412.4%56$4,846,858,663,56012.3%
Consumer Discretionary60$3,582,400,776,05710.0%114$4,414,668,731,03511.2%
Consumer Staples32$2,306,737,494,5916.5%55$2,481,995,448,9966.3%
Energy26$584,837,250,0471.6%35$620,433,091,4151.6%
Financials65$2,888,409,760,9338.1%145$3,392,091,611,6908.6%
Health Care63$4,047,514,335,11211.3%124$4,656,395,907,13011.9%
Industrials73$2,427,749,707,3566.8%142$2,907,534,665,8967.4%
Information Technology72$8,181,822,128,30522.9%174$9,525,938,792,20324.3%
Materials28$750,251,252,4002.1%53$908,463,583,5492.3%
Real Estate31$776,977,108,7412.2%77$1,049,715,249,0542.7%
Utilities28$827,588,364,2602.3%38$909,235,162,6572.3%
Total1,013$35,713,330,907,185100% 1,013$35,713,330,907,185100%

Size Categories

The Russell 1000 Index is sometimes considered to be a "large cap" or "large capitalization" stock index, but we refer to it as a "large and mid cap" index. As explained in our article size categories, there is no standard definition of what makes up a "large cap" stock. Each of the major index providers (MSCI, S&P, NASDAQ, FTSE Russell) uses a different approach to build "large cap" indexes. On our website, we use a cutoff of $10 billion to determine a large cap stock. This is a just a widely used rule of thumb that we have also chosen to use. Similarly, a "mid cap" stock under our definition is a stock with a market capitalization between $2 billion and $10 billion.

Let's look at the stocks in the Russell 1000 Index based on the size categories we use:

Russell 1000Total market
Size Category# of StocksMarket cap% # of StocksMarket cap%
Large cap540$33,215,845,042,83793.0%563$34,221,359,855,48187.2%
Mid cap453$2,463,775,125,3646.9%845$3,771,947,285,4609.6%
Small cap19$33,448,554,7440.1%1,255$1,095,676,605,6492.8%
Micro cap1$262,184,2400.0%1,957$176,586,776,0660.4%
Unknown0$00.0%12$00.0%
Total1,013$35,713,330,907,185100% 4,632$39,265,570,522,656100%

Dividend Yield

The Russell 1000 Index historically has had a dividend yield of around 1.7% to 2.0%. Generally, the large cap stocks in the Russell 1000 Index have a slightly higher dividend yield than the stock market as a whole (i.e. small cap stocks have a slightly lower dividend yield than large cap stocks).

Using the data in our database as of today, here are the current market capitalization weighted average dividend yields of the S&P 500 compared to the Russell 1000 Index, the Russell 2000 Index (i.e. small cap stocks) and the stock market as a whole:

CategoryStock CountAverage Dividend Yield
S&P 5005041.66%
Russell 10001,0131.60%
Russell 20002,0211.54%
Total market4,6321.56%

The Russell 2000 Index consists of the smallest 2,000 U.S. common stocks in the Russell 3000 Index, which includes the largest 3,000 U.S. common stocks based on market capitalization. The Russell 2000 Index is one of the most popular "small cap" indexes.

Performance

Let's look at the performance of the Russell Index using IWB, the iShares Russell 1000 ETF. How does the performance of large cap stocks compare to the total stock market? Let's compare the performance of IWB to VTI, the Vanguard Total Stock Market ETF. VTI tracks the CRSP US Total Stock Market Index.

First, let's compare the market price of IWB to VTI:


Second, let's compare the total return of IWB to VTI:


Note that on our website, when you see a "-TR" symbol, such a symbol is a symbol we invented that references our calculations of the total return of an exchange traded fund (ETF). The total return symbol, or "-TR" symbol, includes the market price performance plus any dividends from that ETF reinvested.

Let's also look at the performance of the S&P 500 Index compared to the Russell 1000 Index. Again, we will use ETFs for our analysis. Let's compare the performance of SPY, the SPDR S&P 500 ETF, to IWB, the iShares Russell 1000 ETF. Let's start with the market price performance:


Second, let's compare the total return of SPY to IWB, again using the computed "-TR" symbols for these ETFs:


The takeaway from the above charts is that over long periods of time, small and mid cap stocks tend to outperform large cap stocks. Thus, IWB outperforms SPY, as the Russell 1000 includes more "mid cap" stocks than the S&P 500 Index, and VTI outperforms SPY, as VTI tracks a total market index that includes small cap and mid cap stocks.

One way to visualize this is to look at a "ratio symbol" that shows the market price of IWB divided by the market price of SPY:


Note, however, that despite the long-term trend of small and mid cap stocks outperforming large cap stocks, there can be shorter time frames where that is not the case. Notice, for example, that if you look at the ratio symbol IWB:SPY for the past five years, IWB has not outperformed SPY:


ETFs that track

Because the Russell 1000 Index is so widely followed, there are a lot of exchange traded funds ("ETFs") that track the Russell 1000 Index:

SymbolDescriptionInception DateLeverage FactorMarket capAction
IWBiShares Russell 1000 ETF05/15/20001.00$23,842,910,000Analyze
VONEVanguard Russell 1000 ETF09/20/20101.00$1,609,920,000Analyze


All data is a live query from our database. The wording was last updated: 02/21/2019.

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