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Catherine Yoshimoto
Director, Product Management
In this paper, we review the long-term investment case for small companies and describe the design and construction methodology of the Russell 2000® Index. We show how the Russell 2000 fits seamlessly into the broader Russell US index family and how it takes an objective, transparent and predictable approach to classifying small companies.
Key takeaways:
- Small-cap stocks have delivered a long-term return premium, although their performance is cyclical
- Russell US indexes offer a complete view of the US equity opportunity set
- The Russell 2000 is the market-leading US small-cap benchmark and is the centre of an important ecosystem of financial products
Points of differentiation:
- Russell index design is rules-based, with no subjectivity
- Russell US indexes are modular, with no overlaps
- Enhancements added to the indexes over the past 40 years make them suitable for use in index-tracking funds
What does this mean for investors
By reading this paper, investors will understand the full heritage of the Russell indexes and the design of the Russell 2000 index. They will appreciate how ongoing maintenance ensures accurate representation of the small-cap opportunity set.