The Russell 2000 Index (RUT) is a benchmark for small-cap stocks, with an average market cap of $2.85 billion. It comprises (approximately) 2,000 companies within the broader Russell 3000 Index, representing approximately 7% of the total market capitalization of the Russell 3000.
Small-cap stocks have historically been regarded as attractive prospects for growth investors - but with mega-cap names dominating the artificial intelligence (AI) explosion of 2023, and higher interest rates keeping most other growth names under pressure, the RUT has struggled significantly this year. The Russell 2000 iShares ETF (IWM) has managed to gain just 1.1% on a YTD basis, compared to 14.9% for the S&P 500 SPDR (SPY) - and a 38.7% jump for the Nasdaq QQQ Invesco ETF (QQQ).
