What Is The Russell 1000?
The Russell 1000 is a stock market index that tracks the performance of the largest 1,000 U.S. companies from the Russell 3000 index.
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Russell 1000 Index Market Cap Range
The Russell 1000 is a large-cap index representing the largest 1,000 companies tracked in the Russell 3000 index. The Russell 3000 is an index of the largest 3,000 publicly traded companies trading on United States exchanges. Thus, the Russell 1000 index is considered a benchmark for large-cap U.S. stock performance
To be included in the Russell 1000, a company must make part of the 1,000 most valuable companies found in the Russell 3000—based on market capitalization - of all the stocks in the Russell 3000.
The smaller 2000 companies that make up the remainder of the Russell 3000 are represented uniquely by the Russell 2000 Index, which is a highly-referenced small-cap index.
The companies in the Russell 1000 are more likely, as compared to Russell 2000 to:
Have a history of producing quality products and services
Pay dividends
Display steady growth
Stocks in the index may change. The Russell 1000 index gets rebalanced once a year at the end of the second quarter. The Russell 1000 may also see minor quarterly changes based on IPO offerings and float updates.
History of The Russell 1000
The Russell 1000 was created by the United Kingdom investment company, FTSE Russell Group. This company is a subsidiary of the London Stock Exchange. The index was established on January 1, 1984, to help investors track market performance in this investment niche—large cap stocks. The Russell 1000 represents nearly 93% of the market capitalization of the entire Russell 3000 index.
Russell 1000 Variations: Growth, Value
Investors can look at derivations from the Russell 1000, investing in subsets of the index that include:
Russell 1000 Growth: A selection of companies generating higher growth.
Russell 1000 Value: A selection of companies that appear to be priced low based on conventional metrics.
Russell 1000 Defensive: A selection of companies that have stable earnings and consistent dividends regardless of how the stock market is performing as a whole.
Russell 1000 Dynamic: A diversified selection of stocks that are adjusted in consideration of macro trends in the market or economy.
Russell 1000 Growth-Defensive: Combines the investment strategies of the Russell 1000 Growth and Russell 1000 Defensive subsets.
Russell 1000 Growth-Dynamic: Combines the investment strategies of the Russell 1000 growth with the Russell 1000 Dynamic index subsets.
Russell 1000 Value-Defensive: Combines the investment strategies of the Russell 1000 Value with the Russell 1000 Defensive index subsets.
Russell 1000 Value-Dynamic: Combines the investment strategies of the Russell 1000 Value with the Russell 1000 Dynamic index subsets.
Top Russell 1000 Companies
The top 5 stocks of the Russell 1000 index as of April 2023 are:
Apple (Nasdaq: AAPL)
Microsoft (Nasdaq: MSFT)
Amazon (Nasdaq: AMZN)
Alphabet - Class A (Nasdaq: GOOGL)
Nvidia (Nasdaq: NVDA)
Using the Russell 1000 Index as a Benchmark
Investors can use the Russell 1000 index as a benchmark for how the large-cap sector of stocks performs as a whole, and tends to be highly correlated with the S&P 500 Index. There are ETFs that investors can buy so that they may passively invest in the indices.
The Russell 1000 index gives investors an overview of how the economy is doing and how the large companies are performing in general.
Tip: Investors can use the Russell 1000 to get a sense of how the large-cap market is performing.
Russell 1000 vs. The S&P 500 (& Other Indices)
The Russell 1000 and S&P 500 indexes both track large-cap stocks, and their performance tends to be closely correlated. The Russell 1000 is a subset of the Russell 3000, which ranks stocks in descending order based on market capitalization. The top 1,000 Russell 3000 stocks are represented in the Russell 1000, while the bottom 2000 are tracked by the Russell 2000 index.
Other popular indexes include:
Nasdaq: Includes stocks listed on the Nasdaq stock exchange, including both large-cap and small-cap stocks
NYSE Composite: An index of more than 2,400 domestic and international companies that give investors a wide view of the overall equities market
Dow Jones Industrial Average: An index that tracks 30 prominent companies listed on the U.S. exchanges
Russell 1000 vs. 2000 vs. 3000
Investors will often hear about the various Russell indexes.
Russell 3000: Tracks the 3,000 largest U.S.-traded stocks
Russell 1000: A group of the largest 1,000 companies tracked in the Russell 3000
Russell 2000: The smallest 2,000 stocks tracked in the Russell 3000
Russell 1000 ETFs & Other Means to Invest
Investors can purchase a Russell 1000 ETF index fund to get exposure to passively invest in the index. The iShares Russell 1000 Index (IWB) and the iShares Russell 1000 Value ETF (IWD) are two such ETFs.
Investors can also consider mutual funds such as the Vanguard Russell 1000 Index Fund (VRNIX). Some investors may choose to use the Russell 1000 as a starting list for choosing stocks. They may choose a tracked equity, perform additional due diligence on it, and buy it individually in their brokerage account.
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