The Russell 2000, managed by FTSE Russell, tracks around 2,000 small-cap U.S. companies, serving as a key benchmark for small-cap stocks. It consists of firms with lower market capitalizations than those in larger indices like the S&P 500, specifically the smallest 2,000 stocks from the Russell 3000 Index, which encompasses the 3,000 largest publicly traded U.S. companies.
Small-cap companies, being less established and having smaller market capitalizations, may offer higher growth potential but are also more volatile.
Consequently, the Russell 2000 is widely utilized by investors and financial professionals to assess the performance of smaller firms and as a benchmark for small-cap investment strategies.
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