What Is the Russell 1000 Index? Definition, Holdings, and Returns
What Is the Russell 1000 Index?
The Russell 1000 Index is a inventory market index used as a benchmark by traders. It’s a subset of the bigger Russell 3000 Index and represents the 1000 prime firms by market capitalization in the USA.
The Russell 1000 is owned and operated by FTSE Russell Group and primarily based in the UK. The Russell 1000 is taken into account a bellwether index for large-cap investing.
Key Takeaways
- The Russell 1000 Index represents the highest 1000 firms by market capitalization in the USA.
- The index is a subset of the Russell 3000 Index.
- The Russell 1000 index contains about 93% of the overall market cap of all listed shares within the U.S. fairness market.
- Efficiency and traits of the index are supplied month-to-month by FTSE Russell.
Understanding the Russell 1000 Index
The Russell 1000 was launched on Jan. 1, 1984, by FTSE Russell, which additionally manages the Russell 3000 and Russell 2000. A subset of the Russell 3000 index, the Russell 1000 is market capitalization-weighted the place the biggest firms represent the biggest percentages within the index and can have an effect on efficiency greater than the smallest Index members.
The index consists of roughly 93% of the overall market capitalization of all listed shares within the U.S. fairness market. Its parts are reconstituted yearly in Could. Nevertheless, newly listed shares with preliminary public choices (IPOs) are thought of for inclusion quarterly.
High Holdings of the Russell 1000 Index
To find out the holdings of the Russell 1000, the corporate ranks the entire shares included within the Russell 3000 by market capitalization and identifies the market cap breakpoint of the 1,000th inventory rating.
This breakpoint is the first market capitalization used to find out index eligibility. Many shares are swapped between the Russell 1000 and Russell 2000 on the annual reconstitution nonetheless variation across the market cap breakpoint is the figuring out issue.
As of December 2022, the highest 10 Russell 100 index constituents embody:
- Apple Inc.
- Microsoft Corp
- Amazon Com Inc.
- Berkshire Hathaway Inc.
- Alphabet Inc. CL A
- Unitedhealth Group Inc.
- Alphabet Inc. CL C
- Johnson & Johnson
- Exxon Mobil Corp.
- JPMorgan Chase & Co.
Efficiency of the Russell 1000 Index
Efficiency and traits of the Russell 1000 Index are supplied month-to-month by FTSE Russell. As of Dec. 31, 2022, the Russell 1000 has 1,010 holdings, the common market cap was $381.35 billion, and the median market cap was $12.2 billion.
The annual return for the Russell 1000 Index was -19.13% in 2022 and the common 3-year return was 7.35%.
Learn how to Spend money on the Russell 1000 Index
Buyers should buy shares of the Russell 1000 index by means of a mutual fund or an exchange-traded fund allotted by kind and sector. Buyers can who do not need to make investments straight within the index might purchase shares in passively managed index exchange-traded funds (ETFs) provided by iShares, together with the iShares Russell 1000 Index ETF (IWB) and the iShares Russell 1000 Worth ETF (IWD) for large-cap and mid to lower-cap portfolios:
iShares Russell 1000 Index ETF (IWB)
Many traders desire the Russell 1000 for large-cap portfolio publicity. The iShares Russell 1000 Index ETF is without doubt one of the main funds providing complete funding in the entire Russell 1000 parts. IWB is an index fund that seeks to match the holdings and return of the Russell 1000 Index.
The fund was established on Could 15, 2000, and the ETF trades on the New York Inventory Change (NYSE). Property below administration (AUM) as of January 2023 have been $28.01 billion.
iShares Russell 1000 Worth ETF (IWD)
The iShares Russell 1000 Worth ETF permits traders to trace each mid and large-cap U.S. equities primarily based on the Russell 1000 index. The ETF was launched on Could 22, 2000.
The ETF trades on the NYSE and as of January 2023, AUM was $54.8 billion.
Russell 1000 Index Variations
FTSE Russell additionally affords a number of index variations derived from the Russell 1000. These variations embody the:
- Russell 1000 Worth
- Russell 1000 Development
- Russell 1000 Defensive
- Russell 1000 Dynamic
- Russell 1000 Development-Defensive
- Russell 1000 Development-Dynamic
- Russell 1000 Worth-Defensive
- Russell 1000 Worth-Dynamic
Russell 1000 Index vs. Dow Jones Industrial Common vs. Normal & Poor’s 500 Index
The Russell 1000 is a much wider index than the often-quoted Dow Jones Industrial Common (DJIA) and Normal & Poor’s (S&P) 500 Index, though all three are thought of large-cap inventory benchmarks.
The DJIA, which is often known as the Dow 30, tracks the biggest 30 blue-chip shares listed on the NYSE and the Nasdaq. Transport and utility firms are excluded from the index. It’s the second-oldest inventory market index in the USA and customarily serves as a broad illustration of the U.S. economic system.
The S&P 500 is without doubt one of the mostly used indexes to measure the U.S. economic system and large-cap firms within the U.S. It’s fabricated from 500 of the biggest firms within the nation.
What Is the Russell 2000 Index?
The Russell 2000 Index is a small-cap inventory market index that features the smallest 2,000 shares within the Russell 3000 Index.
What Elements Decide Which Shares are Added To the Russell 100O Index?
Shares are both added or subtracted from indexes primarily based on a number of standards together with market capitalization, share worth, and buying and selling quantity.
Does the Russell 1000 Index Pay a Dividend?
As of December 2022, the dividend yield for the Russell 1000 was 1.72%.
The Backside Line
The Russell 1000 is owned and operated by FTSE Russell Group, primarily based in the UK. The Russell 1000 Index is a subset of the bigger Russell 3000 Index and represents the 1000 prime firms by market capitalization in the USA. As of December 2022, the Russell 1000 index comprised 93% of the overall market capitalization of all listed shares within the U.S. fairness market.
