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The Russell 1000 Index is a market capitalization-weighted stock index made up of 1,000 of the largest publicly traded companies in the US, accounting for about 90% of the total US market capitalization value. It covers a wide variety of industries and is often regarded as a guide to the overall performance of the US stock market.
The Russell 1000 Index is a type of market capitalization-weighted stock index. It is made up of 1,000 of the largest publicly traded companies in the United States. In general, it is used as an indicator to see how well the general values of the shares are adjusted in the United States stock market.
As a market capitalization weighted index, the value of the Russell 1000 Index is generally affected to varying degrees depending on the capitalization value of the many companies included in the index. The companies with the largest market capitalization, which is usually determined by multiplying the total number of shares by the value of the price per share, generally have the biggest impact. For example, if Company A has a market capitalization of $5 billion and Company B has a market capitalization of $16 billion, a change in the value of the Company B’s shares would have a greater impact on the overall value of the Russell 1000 Index than the same change in the value of Company A’s shares.
Typically, for a company to be included in the Russell 1000 Index, it must be considered large cap, which means that the total value of all its outstanding shares is greater than approximately $5 billion dollars. These companies are generally the top 1,000 large-cap companies that are also included in the Russell 3000 Index. This largest index is made up of 3,000 publicly traded companies that have the largest market capitalization values. It is generally believed to account for about 98 percent of the total capitalization value of all publicly traded US stocks. As a testament to the size of the companies included in the Russell 1000 Index, they account for about 90 percent of the total US market capitalization value, while the remaining 2,000 companies also included in the Russell 3000 Index only account for about of 8 percent.
In addition to being made up of companies that comprise a large majority of US stock value, the Russell 1000 Index also generally covers a wide variety of industries. The companies and sectors included are adjusted approximately annually to reflect changing values of market capitalization, but generally include companies in healthcare, technology, energy, consumer products, and financial services. Because of this broad industry inclusion and large market share, the Russell 1000 Index is often regarded by investment professionals and economists around the world as a guide to the overall performance of the United States stock market.
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