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The Russell 2500 Index tracks the 2,500 smallest companies in the Russell 3000 Index, representing the small-cap and mid-cap segments of the U.S. equity market. Launched on June 1, 1990 and maintained by FTSE Russell, a subsidiary of the London Stock Exchange Group, it is designed to capture roughly 19% of the total market capitalization of the Russell 3000. The index's weighted average market capitalization is approximately $4.3 billion, its median market capitalization is approximately $1.2 billion, and the largest constituent carries a market cap of approximately $18.7 billion.
The Russell 2500 sits between the Russell 2000 and the Russell 1000, making it the go-to benchmark for strategies that span both small-cap and mid-cap territory.
The Russell 2500 is a subset of the Russell 3000, which ranks all eligible U.S. listed companies by total market capitalization on the annual reconstitution rank day, held in April. The top 500 companies form the Russell 1000. The bottom 2,500 form the Russell 2500. The bottom 2,000 of those form the Russell 2000, which means the Russell 2500 includes all Russell 2000 stocks plus the next 500 companies up the size ladder.
FTSE Russell applies a capitalization banding rule around key breakpoints to prevent excessive turnover. Companies whose market caps drift slightly above or below a boundary receive the benefit of that band before being moved between indices. At the June 2025 reconstitution, $114.7 billion traded on the NYSE and $102.5 billion on Nasdaq in the closing auction alone, reflecting the scale of index rebalancing activity.
The Russell U.S. Indexes reconstitute once a year in June under the current schedule, with the newly reconstituted index taking effect after market close on the fourth Friday of June. Beginning in 2026, FTSE Russell will shift to a semi-annual reconstitution schedule, adding a second annual rebalancing to keep the index more current as market conditions evolve between the traditional June reconstitutions.
The Russell 2500 is the standard benchmark for the "SMID cap" category, a term for strategies blending small-cap and mid-cap exposures. Institutional investors, pension funds, and fund managers who want exposure across the full small-to-mid range without separate small-cap and mid-cap mandates use the Russell 2500 as their benchmark.
As of current FTSE Russell data, approximately $11.78 trillion in total assets are benchmarked to the suite of Russell U.S. Indexes, with the Russell 2500 representing one of the core building blocks within that framework. ETFs and mutual funds tracking the Russell 2500 allow retail investors to access the same SMID-cap exposure in a single fund.
| Russell 1000 | Russell 2000 | Russell 2500 | Russell 3000 | |
|---|---|---|---|---|
| Coverage | Top 1,000 by market cap | Bottom 2,000 of Russell 3000 | Bottom 2,500 of Russell 3000 | Top 3,000 U.S. companies |
| Segment | Large-cap | Small-cap | SMID-cap | Broad market (~98% of investable US equity) |
| % of Russell 3000 Market Cap | ~81% | ~7% | ~19% | 100% |
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