Business, Legal & Accounting Glossary
The Russell 3000 is an index calculated by ranking all US common stocks companies in order of highest market capitalization and picking the top 3000. The Russell 3000 Index is published by the Frank Russell Company. The Russell 3000 Index represents the largest 3000 companies in the US, or about 98% of the U.S. equity market, and therefore is a reasonable benchmark to evaluate the entire US stock market. Any changes to the status of a stock included in the Russell 3000 Index is not updated during the year but the Russell 3000 Index is reconstructed every year. The reconstitution occurs at the end of June and is based on US companies trading on the last trading day of May.
Stocks in those companies are reordered by market capitalization and the new top 3000 stocks are then selected to be included in the current reconstituted Russell 3000 Index. This annual Russell 3000 Index update reflects any new or growing equities that developed during the previous 12 months. The Russell 3000 Index has 2 variations: the Russell 3000 growth Index and the Russell 3000 value Index.
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This glossary post was last updated: 6th February, 2020