What Is the Russell 1000 Index? Definition, Holdings, and Returns

What Is the Russell 1000 Index?

The Russell 1000 Index is a stock market index used as a benchmark by investors. It is a subset of the larger Russell 3000 Index and represents the 1000 top companies by market capitalization in the United States. The Russell 1000 is owned and operated by FTSE Russell Group and based in the United Kingdom. The index is considered a bellwether index for large-cap investing.

Understanding the Russell 1000 Index

The Russell 1000 was launched on Jan. 1, 1984, by FTSE Russell, which also manages the Russell 3000 and Russell 2000. A subset of the Russell 3000 index, the Russell 1000 is market capitalization-weighted where the largest companies constitute the largest percentages in the index and will affect performance more than the smallest Index members.

The index consists of approximately 93% of the total market capitalization of all listed stocks in the U.S. equity market. Its components are reconstituted annually in May. However, newly listed stocks with initial public offerings (IPOs) are considered for inclusion quarterly.

Top Holdings of the Russell 1000 Index

To determine the holdings of the Russell 1000, the company ranks all of the stocks included in the Russell 3000 by market capitalization and identifies the market cap breakpoint of the 1,000th stock ranking.

This breakpoint is the primary market capitalization used to determine index eligibility. Many stocks are swapped between the Russell 1000 and Russell 2000 at the annual reconstitution however variation around the market cap breakpoint is the determining factor.

As of May 31, 2023, the top 10 Russell 1000 index constituents include:

• Apple (AAPL)
• Microsoft (MSFT)
• Amazon (AMZN)
• Nvidia (NVDA)
• Alphabet Class A (GOOGL)
• Alphabet Class C (GOOG)
• Meta (META)
• Berkshire Hathaway (BRK.B)
• Tesla (TSLA)
• Unitedhealth Group (UNH)
  

Performance of the Russell 1000 Index

Performance and characteristics of the Russell 1000 Index are provided monthly by FTSE Russell. As of Dec. 31, 2022, the Russell 1000 has 1,010 holdings, the average market cap was $591.44 billion, and the median market cap was $11.81 billion. The annual return for the Russell 1000 Index was -19.13% in 2022 and the average 3-year return was 12.45%.

How to Invest in the Russell 1000 Index

Investors can purchase shares of the Russell 1000 index through a mutual fund or an exchange-traded fund allocated by type and sector. Investors can who don't want to invest directly in the index may buy shares in passively managed index exchange-traded funds (ETFs) offered by iShares, including the iShares Russell 1000 Index ETF (IWB) and the iShares Russell 1000 Value ETF (IWD) for large-cap and mid to lower-cap portfolios:

iShares Russell 1000 Index ETF (IWB)

Many investors prefer the Russell 1000 for large-cap portfolio exposure. The iShares Russell 1000 Index ETF is one of the leading funds offering comprehensive investment in all of the Russell 1000 components. IWB is an index fund that seeks to match the holdings and return of the Russell 1000 Index.

The fund was established on May 15, 2000, and the ETF trades on the New York Stock Exchange (NYSE). The total assets under management (AUM) as of June 30, 2023, were $30.68 billion.

iShares Russell 1000 Value ETF (IWD)

The iShares Russell 1000 Value ETF allows investors to track both mid and large-cap U.S. equities based on the Russell 1000 index. The ETF was launched on May 22, 2000. The ETF trades on the NYSE and as of June 30, 2023, AUM was $51.09 billion.

Russell 1000 Index Variations

FTSE Russell also offers several index variations derived from the Russell 1000. These variations include the:

• Russell 1000 Value
• Russell 1000 Growth
• Russell 1000 Defensive
• Russell 1000 Dynamic
• Russell 1000 Growth-Defensive
• Russell 1000 Growth-Dynamic
• Russell 1000 Value-Defensive
• Russell 1000 Value-Dynamic

Russell 1000 Index vs. Dow Jones Industrial Average vs. Standard & Poor's 500 Index

The Russell 1000 is a much broader index than the often-quoted Dow Jones Industrial Average (DJIA) and Standard & Poor's (S&P) 500 Index, although all three are considered large-cap stock benchmarks.

The DJIA, which is also known as the Dow 30, tracks the largest 30 blue-chip stocks listed on the NYSE and the Nasdaq. Transport and utility companies are excluded from the index. It is the second-oldest stock market index in the United States and generally serves as a broad representation of the U.S. economy.

The S&P 500 is one of the most commonly used indexes to measure the U.S. economy and large-cap companies in the U.S. It is made of 500 of the largest companies in the country.

The Bottom Line

The Russell 1000 is owned and operated by FTSE Russell Group, based in the United Kingdom. The Russell 1000 Index is a subset of the larger Russell 3000 Index and represents the 1000 top companies by market capitalization in the United States. As of December 2022, the Russell 1000 index comprised 93% of the total market capitalization of all listed stocks in the U.S. equity market.