Market Structure
What is Russell 2000 Index?
The Russell 2000 tracks ~2,000 small-cap US stocks (the bottom two-thirds of the Russell 3000), the standard US small-cap benchmark, capturing companies typically valued between $300M and $2B.
Formula
Float-adjusted market-cap-weighted. Reconstituted annually each June. Maintained by FTSE Russell.
How to Interpret
The Russell 2000 tends to be more domestic/cyclical than large-caps (more sensitive to US GDP and interest rates). Tracked by IWM (~$60B AUM). Small-caps historically have higher long-term returns than large-caps but with much higher volatility and deeper drawdowns. India's small-cap equivalent is the Nifty Smallcap 250.
Typical Ranges
Long-term return: ~9–10% annually with volatility ~20–25%. Often used as a 'risk-on' barometer, outperforms in early-cycle recoveries.