Russell Top 200 Index
What Is the Russell Top 200 Index?
The Russell 3000 is a capitalization-weighted stock market index. Its aim is to be the barometer of the whole U.S. stock market. The Russell Top 200 Index is an index of the largest 200 companies in the Russell 3000 index. It is regularly utilized as a benchmark index for U.S.- based ultra large-cap (mega-cap) stocks.
Understanding the Russell Top 200 Index
The Russell Top 200 Index is a more focused rendition of the S&P 500, yet a significant number of the Russell 200 individuals are likewise listed on the larger benchmark. As of Nov. 30, 2021, the Russell Top 200 Index addresses around 67% of total market capitalization of all US-listed stocks.
A huge portion of the underlying index is addressed by companies in the financial services, consumer discretionary, healthcare, and technology sectors. Technology's weighting in the index has consistently increased over the course of the last decade as many companies hope to reinforce business operations with state of the art technology. Adequately sure, the greatest holdings comprise of some tech goliaths like Apple (AAPL ), Alphabet (GOOG) and Microsoft (MSFT ). As of Nov. 30, 2021, the average market capitalization of stocks listed in the index remains at $805 billion.
Benefits of the Russell Top 200 Index
Investing in ultra large-cap stocks offers a number of benefits that are inaccessible in smaller companies. For a certain something, large companies produce predictable returns with definitely less volatility than a company just getting everything rolling. They control different business channels which means specific revenue streams can make up for different ones in attempting times.
Likewise, the companies frequently have a history of paying dividends or repurchasing shares, offering investors with a constant flow of income. For the Russell Top 200, investors can expect a similar level of consistency and stability found by a larger number of people of its constituents.
Super cap stocks frequently use huge influence in various industries due to measure and volume of goods and services sold during a given time span. Apple, for example, holds a market cap of more than $2.1 trillion, as of March 31, 2021, while Amazon arrived at new highs on the progress of retail operations and web services. As of March 31, 2021, there are 18 companies traded in the U.S that hold capitalizations more than $300 billion, a large portion of them currently operating in the technology sector. In the past, blue-chip companies like ExxonMobil (XOM) and General Electric (GE) held the greater part of these seats as investors confided in them to deliver predictable dividend payments and consistent returns.
Every year the FTSE Russell reconstitutes the index to reject companies that presently not meet the base criteria or account for growing ones that require inclusion. The index itself is found under the symbol RT200, however frequently trades through different exchange-traded funds. The most famous exchange-traded fund in the Russell 200 Index is the iShares Russell Top 200 Index, delivered in September 2009.
Limitations of the Russell Top 200 Index
The primary disservice of investing in a mature company or index that tracks them is the limited upside growth potential compared to an upstart. Small companies present new technology and products at a lot quicker pace. This frequently converts into significant additions in the stock market. A large company can't develop at a similar pace as a small one because of extended endorsement processes through different layers of governance. Accordingly, shares are traded for value or income characteristics instead of growth potential.
Features
- The Russell Top 200 index is a U.S. uber cap equity index distributed by FTSE Russell.
- The Top 200 is utilized as a ultra-large cap benchmark index and rivals the S&P 500 and Dow 30.
- The index is made out of the 200 largest companies out the 3000 total companies in the Russell market index.
