CLOV, UWMC, Russell Inclusion and Difference between 1000, 2000 & 3000 Index
As you guys are all aware, the first correction of Russell’s annual reconstitution came out last night.
From their updated list, CLOV is deleted and UWMC was newly added to Russell 3000.
As you can see from the list, they don’t indicate whether the company is in Russell 1000 or Russell 2000. Everything is written as 3000.
I was reading all replies and realized many people misunderstood the difference between Russell 1000, 2000, and 3000. Some guy even mentioned that CLOV was a better company so it was included in Russell 2000 and UWMC is not good enough to make it to Russell 2000, and only made to Russell 3000…
Here goes a simple explanation of what are Rusell 1000, 2000, and 3000:
Russell 1000 = The largest 1000 stock indexed in Russell 3000
Russell 2000 = The subset of smallest 2000 companies in Rusell 3000
Russell 3000 = Russell 1000 + Russell 2000
When they announce a company is included in Russell 3000, we only have half the news. It will be either 1000 or 2000. The easiest way to make an educated guess is to check the company’s market capital.
If the market capital is large enough to be included in Russell 1000, probably they are in Russell 1000. If the company’s market cap is smaller compared to large 1000, it will be in Russell 2000.
I believe UWMC’s market capital is large enough to be included in Russell 1000.
Please be aware that Russell 2000 is not better than Russell 3000. IMO, Russell 3000 is better because it is more diversified for smaller risks. Obviously, Russell 1000 is the best.
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June 11, 2021 at 10:22AM