The Russell 2000 index closed above 1,000 points for the first time last Friday and closed at an all-time high of 1,018.05 Tuesday. Although the index is commonly cited, many investors don’t know much about it.
The index was launched in 1984 by Russell Investments, an asset manager now based in Seattle. The index includes approximately 2,000 publicly traded companies with the smallest market valuations. Membership in the Russell 2000 is reset annually on the last Friday in June. Stocks with a significant increase in value often become too large and are replaced. This year, 171 stocks were added. One of the largest was the power company Dynegy, which has a market value of $2.1 billion.
The index is the most widely used benchmark for the performance of small-cap mutual funds. Its 20 percent return this year outpaces the 16 percent rise of the Standard & Poor’s 500 index.Associated Press