Russell 2000 brokers offer trading opportunities in the small-and medium-cap equities market in the US. The index is considered the benchmark for measuring the financial performance of small US firms. This tutorial will rank the best Russell 2000 brokers, with a lowdown of the largest listed companies, the index’s history, and trading tips.
Russell 2000 Brokers UK
AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available, alongside a comprehensive education center and multilingual customer support.
Demo Account Regulated By MT4 Integration Yes ASIC, CySEC, FSCA, ISA, CBol, FSA, FRSA Yes Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail) 1:400 (Pro)
Interactive Brokers is a leading global brokerage that provides access to a comprehensive offering of stocks as well as forex, futures, metals, bonds and cryptos. The firm has over 40 years experience in the online trading industry and is heavily regulated by SEC, FCA, IIROC, and SFC. Traders use the proprietary Trader Workstation and can access powerful tools and data feeds as well as comprehensive educational resources.
Demo Account Regulated By MT4 Integration Yes SEC, FCA, IIROC, SFC No Min. Deposit Min. Trade Leverage $0 $100 1:50
OANDA is an award-winning global broker, established in 1996. The hugely respected brand offers competitive trading accounts and serves clients from 196 countries. It has proven a popular option with both beginners and experienced traders thanks to its user-friendly and sophisticated web platform, no minimum deposit and premium currency products and services. The company is also overseen by reputable regulators, including the FCA, ASIC and CIRO.
Demo Account Regulated By MT4 Integration Yes FCA, ASIC, KNF, MAS, CIRO, FFAJ, BVI Yes Min. Deposit Min. Trade Leverage $0 $0 1:30 (UK), 1:200 (EU)
IG is an award-winning broker that has an excellent reputation globally. The brand offers spread betting, CFD and forex trading across a comprehensive suite of markets. IG is also multi-regulated, provides a great trading app and has 50 years experience.
Demo Account Regulated By MT4 Integration Yes FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA Yes Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:222 (Pro)
eToro is a top-rated multi-asset platform which offers both investing in stocks and cryptoassets. Launched in 2007, the brand has millions of active traders globally and is authorized by tier one regulators, including the FCA and CySEC. Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply. 76% of retail CFD accounts lose money.
Demo Account Regulated By MT4 Integration Yes FCA, ASIC, CySEC, FSA No Min. Deposit Min. Trade Leverage $50 $10 1:30
FxPro is an award-winning forex, CFD and spread betting broker with over 2 million clients worldwide. The broker is regulated in 4 jurisdictions and offers 24/5 customer support, earning it a high trust and safety score. FxPro has also picked up more than 100 industry accolades for its competitive trading conditions, including fast execution and deep liquidity.
Demo Account Regulated By MT4 Integration Yes FCA, CySEC, FSCA, SCB, FSC Yes Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail), 1:500 (Pro)
FXCM is a respected forex and CFD broker, established since 1999. The British-headquartered broker has won multiple awards and operates in various jurisdictions, including the UK and Australia. With zero commissions, over 400 assets, and a range of analysis tools, FXCM is a popular choice. The broker is also FCA regulated and authorized in Australia and South Africa.
Demo Account Regulated By MT4 Integration Yes FCA, CySEC, ASIC. Yes Min. Deposit Min. Trade Leverage $50 Variable 1:30
Libertex is a well-known broker, established in 2012. The regulated brand has served numerous clients and is regulated by the Cyprus Securities and Exchange Commission with license number 164/12. Libertex offers CFD trading on 250+ underlying assets, including through an innovative and user-friendly proprietary web trader platform. Choose between CFDs on forex, cryptocurrencies, commodities, stocks, indices and ETFs, which are available with tight spreads and low commissions.
Demo Account Regulated By MT4 Integration Yes CySEC Yes Min. Deposit Min. Trade Leverage €100 €20 Up to 1:30 (Retail)
How To Compare Russell 2000 Brokers
The top Russell 2000 brokers provide everything you need to plan and execute trades, from demo accounts and educational resources to online trading platforms with fast order execution.
Important factors to consider when choosing a brokerage with access to the Russell 2000 include:
You can trade the Russell 2000 with various instruments such as CFDs, options and futures. Market-cap-weighted ETFs such as the Vanguard Russell 2000 Growth ETF are also available, which track the overall performance of the index.
Different instruments suit different strategies and timeframes. Traders who want to boost their trading power can choose Russell 2000 brokers that offer margin trading through instruments like CFDs and spread betting, or they could pick a leveraged ETF. Longer-term investors may prefer to buy stocks directly or invest in an index tracker.
Futures are sometimes out of retail traders’ reach, but Interactive Brokers’ micro e-mini Russell 2000 futures contracts are more accessible, reducing the minimum stake to a fraction of the typical upfront cost (1/10 typical e-mini futures).
It is always safest to choose a Russell 2000 broker that is overseen by a reputable regulator, and for most good UK brokers that means the Financial Conduct Authority (FCA).
However, British investors are not limited to trading with UK-based brokers, and could consider platforms overseen by top-tier bodies such as the US Securities and Exchange Commission (SEC).
One of the most important safeguards to look out for is negative balance protection, which is mandatory for all FCA-regulated brokers. This prevents retail traders from becoming indebted to brokers following a series of bad trades.
It is also worth ensuring that your Russell 2000 broker follows operational best practices by segregating client assets from their own accounts and using advanced encryption systems.
Platform & Tools
Your Russell 2000 broker should support a stable trading platform that provides swift access to the market and timely execution.
AvaTrade, for example, provides traders with several platform choices including MetaTrader 4, two bespoke apps, and a proprietary web trader.
Tip: you can test Russell 2000 brokers’ platforms through demo accounts to ensure they provide adequate analysis tools and features such as historical stock price data, customisable charts, signals and technical indicators.
Educational resources can be useful for traders of all experience levels, and many good Russell 2000 brokers provide helpful content.
Look for guides to topics that are relevant to the Russell 2000 as well as regular live streams, videos or podcasts to help with general trading strategy.
Expert analysis in the form of price forecasts, quotes, YTD performance metrics, and annual returns information may also improve your hit rate when trading the Russell 2000.
Choose a Russell 2000 broker that has good customer support. Live chat or phone hotlines are important for urgent queries that need a swift response.
Many reputable Russell 200 brokers offer several contact methods; FxPro, for instance, provides clients with 24/5 customer support including a toll-free UK phone number, email, and live chat.
What Is The Russell 2000?
The Russell 2000 is a capitalisation-weighted index that tracks 2000 small-cap US companies.
The index is managed by FTSE Russell Group and its parent index is the Russell 3000, which constitutes the largest 3000 publicly traded stocks in the United States. This is split into the top 1000 companies, measured by the Russell 1000 index, and the remaining 2000 in the Russell 2000.
FTSE Russell rebalances its indices each May using pre-defined criteria including company structure and size. The list of companies is then ranked by market cap with the largest 1000 taking their place on the Russell 1000 index and the remaining companies categorised into the Russell 2000 and alternative indices.
Although the Russell 2000 comprises around two-thirds of the companies in the Russell 3000, it only accounts for around 7% of the index’s market capitalisation.
Since the Russell 2000 is an index, traders cannot buy and sell shares as they would with ordinary stock. Instead, they can invest in an ETF or other fund that tracks the Russell 2000’s performance, or they can speculate on its price movements using derivatives such as CFDs.
The Russell 2000 index was established in 1984 by the Frank Russell Company. It was the industry’s first small-cap benchmark measuring the performance of large numbers of small and medium-cap companies in the US.
Today, the index is operated by the FTSE Russell Group.
There are two sub-indices associated with the Russell 2000 index:
- Russell 2000 Value Index – The index includes Russell 2000 organisations with low price-to-book ratios, a low Institutional Brokers’ Estimate System (I/B/E/S) forecast, and a lower sales per share historical growth across the past five years
- Russell 2000 Growth Index – The index fund includes Russell 2000 companies with a high price-to-book ratio, an elevated Institutional Brokers’ Estimate System (I/B/E/S) forecast, and a high sales per share historical growth across the past five years
The 10 biggest stocks in the Russell 2000 index by market cap in 2023 were:
- Emcor Group Inc
- Iridium Communications
- Crocs Inc
- Inspire Medical Systems
- Saia Inc
- Kinsale Capital Group
- Texas Roadhouse Inc
- Shockwave Medical
- Rbc Bearings Inc
- Halozyme Therapeutics
Some other well-known companies in the Russell 2000 index include Southwestern Energy, Avis Budget Group Inc, and Ovintiv Inc.
The largest sectors represented on the index in 2023 were industry with 17.7%, finance with 16.8%, and healthcare with 15.4%.
Good Russell 2000 brokers provide financial metric data for the top 50 stocks, while some cover all listed companies. A comprehensive data offering should include market cap values, performance growth, upcoming announcements and more.
Trading hours on the Russell 2000 index vary depending on the product and broker.
CME Globex, for example, offers Russell 2000 futures trading from Sunday 6pm to Friday 5pm Eastern Time (GMT-6) with a trading halt between 4:15pm and 4:30pm. Alternatively, the Chicago Board Options Exchange offers trading on Russell 2000 options between 9:30am and 4:15pm (ET).
Some Russell 2000 brokers may also offer premarket and after-hours trading.
A reconstitution cycle takes place once a year at the end of Q2, when the listings are adjusted to reflect the companies’ performance.
As old firms move out of the index and new firms are introduced in a continuing cycle, the number of holdings within the index will often fluctuate under or over 2000.
Russell 2000 Vs Other Indices
As a small-cap index, the Russell 2000 index has a very different composition to an index like the S&P 500, which tracks the performance of 500 of the largest US firms including giants like Apple, Amazon, and Microsoft, or the Dow Jones, which tracks 30 of the top US companies.
The Russell 2000 index instead measures the share value of lesser-known small-cap firms, so it is more appropriate to compare it to another small-cap capitalisation-weighted index like the S&P 600.
Over a long timeframe, the less volatile S&P 600 has outperformed the Russell 2000, with average returns of 12.8% per year compared to the Russell 2000’s 11.2% per year in the decade up to February 2022.
The S&P 500 tends to perform better than either, with an average annual return of 14.6% over the same period.
Small Cap Risks
Investors tend to turn to small-cap stocks when looking for high-risk, high-return investments. Small-cap stock prices typically increase when an economy grows, but economic uncertainty such as inflation and financial recession usually hit smaller companies harder.
According to a Morgan Stanley publication, over 40% of Russell 2000 listed organisations were unprofitable during the challenging macroeconomic conditions of 2022. Overall, the Russell 2000 index tends to be more volatile as smaller companies are generally less equipped to shield themselves from macroeconomic turmoil.
Economic calendars offered by some Russell 2000 brokers are therefore a useful tool for keeping up to date with upcoming events and political announcements that may impact your positions. This includes reconstitution dates each year and new entries to the market which can create volatility.
Bottom Line On The Russell 2000
Russell 2000 brokers offer an accessible way to speculate on the performance of lesser-known US companies. As a retail investor, you can expect to trade ETFs, CFDs, futures, and options on this small-cap index. And although the added volatility of the Russell 2000 brings risks, this selection of small-cap stocks also offers investment opportunities.
How Is The Russell 2000 Index Constructed?
The Russell 2000 index is a stock market index that tracks the performance of the smallest 2000 firms, by market cap, listed on the Russell 3000 index. The index is operated by FTSE Russell, an entity of the London Stock Exchange Group (LSEG).
What Companies Are In The Russell 2000 Index?
The Russell 2000 index constitutes the smallest 2000 domestic US stocks listed on the Russell 3000 index. The list of companies in the Russell 2000 changes frequently according to market capitalisation.
Major firms include Nesco Holdings Inc, Hertz Global Holdings Inc, Avis Budget Group Inc, and Iridium Communications.
How Can I Trade The Russell 2000 Through Online Brokers?
You can trade the Russell 2000 index via online brokers through derivatives such as CFDs. You can also invest in ETFs or funds that track the Russell 2000 or purchase shares in individual companies that are listed on the index.
How Do I Choose A Russell 2000 Broker?
There are several factors to consider when comparing the best Russell 2000 brokers. Review trading fees, platform access, investing products, access to customer support, UK regulations, and user ratings. The majority of deliberations, however, will be dependent on your trading strategy and goals.