Direct Answer
The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 by market capitalization. Because the Russell 1000 represents the largest 1,000 stocks in the Russell 3000 universe, the Midcap Index captures the lower end of large-cap territory alongside the top end of what other providers call mid-cap. FTSE Russell administers the index using float-adjusted market-cap weighting.
How the Midcap Index Is Carved from the Russell 1000
The Russell 1000 covers the 1,000 largest eligible U.S. stocks by total market capitalization within the Russell 3000 universe. FTSE Russell splits the Russell 1000 into two sub-indexes based purely on size ranking: the top 200 companies by market cap form the Russell Top 200, and the remaining 800 form the Russell Midcap Index. These two sub-indexes are mutually exclusive and collectively account for all Russell 1000 constituents, so holding both in proportion to their market weights is equivalent to holding the full Russell 1000.
The dividing line between the Russell Top 200 and the Russell Midcap is not fixed in dollar terms; it changes with each annual reconstitution as the relative sizes of the largest U.S. companies evolve. In periods when a small number of mega-cap companies grow very large relative to the rest of the Russell 1000, the gap in company size between the Top 200 and the Midcap widens. When the size distribution is more compressed, the dividing line sits closer to the overall large-cap threshold.
This mechanical, size-only selection approach is a defining feature of the Russell methodology. There is no committee review, no profitability requirement, and no liquidity screen beyond the basic eligibility criteria for inclusion in the Russell 3000 universe. A company that crosses from the Russell 2000 into the Russell 1000 at reconstitution automatically becomes eligible for the Midcap Index if its size places it in the bottom 800 of the Russell 1000 at that time.
Float-Adjusted Market-Cap Weighting
FTSE Russell weights each Russell Midcap constituent by float-adjusted market capitalization. Float adjustment removes shares that are not freely tradable in the public market, including insider-owned shares above specified thresholds, government-held stakes, and locked-up shares. The adjustment ensures that index weights reflect the market's investable opportunity set rather than the theoretical total company value.
For mid-cap companies, float adjustment can have a meaningful effect on weights when a company has substantial insider ownership retained from its IPO or private ownership phase. A founder-led mid-cap company that went public recently may have a significantly smaller public float as a percentage of total shares than an older company with dispersed institutional ownership. The float adjustment reduces such a company's index weight relative to its total market capitalization, moderating the concentration risk that would otherwise arise from including tightly held companies at their full notional value.
Float adjustment factors are set at the annual reconstitution and may be updated between reconstitutions when significant share structure changes occur. Secondary offerings, share repurchase programs, and changes in insider selling restrictions can all affect the float adjustment factor applicable to a given company. FTSE Russell's methodology documentation specifies the conditions under which off-cycle float factor updates are applied.
Annual June Reconstitution
FTSE Russell reconstitutes the Russell Midcap each June as part of its broader annual Russell US index reconstitution cycle. All eligible U.S. companies in the Russell 3000 universe are re-ranked by total market capitalization on the designated rank date. Companies that have grown large enough to enter the top 200 of the Russell 1000 migrate from the Midcap into the Top 200. Companies that have declined below the Russell 1000 threshold migrate from the Midcap into the Russell 2000. New entrants to the Russell 1000 from the Russell 2000 are placed in the Midcap if their size falls outside the top 200.
The reconstitution effective date is typically the last Friday of June. FTSE Russell publishes preliminary membership lists in advance, allowing fund managers who track the Russell Midcap to plan the associated trading. Mid-cap stocks are generally more liquid than small-cap stocks but less liquid than mega-cap stocks, so the reconstitution impact depends on the specific companies involved and their trading volumes relative to the required position changes.
Between annual reconstitutions, the Russell Midcap does not add newly public companies on a quarterly basis in the same way the Russell 2000 does, because the Russell 1000 membership updates at the quarterly review only if a newly listed company is large enough to qualify directly for the large-cap tier at the time of its IPO. Most IPOs are not large enough to enter the Russell 1000 immediately, so the Midcap's quarterly additions are rarer than the Russell 2000's.
Comparing with the Russell Top 200
The Russell Top 200 Index covers the 200 largest companies in the Russell 1000, sitting above the Midcap in the size hierarchy. The two sub-indexes together form the full Russell 1000. The Top 200 is a concentrated large-cap index in which a small number of mega-cap companies can carry very large individual weights because float-adjusted market-cap weighting amplifies the dominance of the largest stocks. The Midcap, with 800 constituents distributed over a narrower size range, has a more even weight distribution and is less sensitive to the behavior of any single company.
Performance differences between the Midcap and the Top 200 reflect the size premium and the dynamics of large-cap leadership versus mid-cap leadership across market cycles. In periods when technology or consumer mega-caps drive broad market performance, the Top 200 can outperform significantly because those companies carry very large weights. In periods of broader economic recovery or when smaller companies benefit from sector-specific tailwinds, the Midcap can outperform the Top 200.
For an investor seeking broad U.S. large-cap exposure without concentrating in mega-cap stocks, the Russell Midcap can serve as a complement to or substitute for indexes that include all Russell 1000 companies. The Midcap tilts toward the quality and size characteristics of established but not yet mega-cap companies, many of which are leading players in their industries but below the scale of the very largest global enterprises.
Comparing with the Russell 2000
The Russell 2000 covers the 2,000 smallest stocks in the Russell 3000, forming the small-cap tier that sits below the Russell Midcap in the size hierarchy. The two indexes share no constituents: every stock in the Russell 3000 belongs to either the Russell 1000 (which includes the Midcap) or the Russell 2000. Companies migrate between these tiers at each annual reconstitution based on their current size ranking.
The Midcap Index consists of companies that are substantially larger than Russell 2000 constituents, with correspondingly higher levels of analyst coverage, balance sheet scale, and secondary market liquidity. Mid-cap companies have typically navigated the most dangerous phase of early business growth and have demonstrated that their business models can generate meaningful revenue at scale. Small-cap companies in the Russell 2000 often face more uncertainty about whether their current business models will reach mid-cap scale.
The Russell Midcap generally exhibits lower volatility than the Russell 2000 because of these liquidity and fundamental risk differences. When economic conditions deteriorate, small-cap companies can face more acute financial pressure than mid-cap companies with larger balance sheets and better access to capital markets. The return premium for taking small-cap risk has historically been documented in academic research, though it has been uneven across different time periods and market environments.
Comparing with the S&P MidCap 400
The S&P MidCap 400 is the most commonly cited alternative mid-cap benchmark in the U.S. equity market. It covers approximately 400 mid-cap companies selected by the S&P Dow Jones Indices Index Committee using criteria that include minimum market capitalization, earnings profitability over four consecutive quarters, adequate liquidity, and public float requirements. The committee applies judgment in borderline cases, making the S&P 400 a hybrid of rules and discretion rather than a purely mechanical index.
The Russell Midcap uses no selection committee and no profitability screen. Its 800 constituents are determined entirely by size ranking within the Russell 1000. As a result, the Russell Midcap includes some companies that would fail the S&P 400's profitability screen, particularly unprofitable companies in high-growth sectors. The Russell Midcap also includes more constituents in total, giving it broader coverage of the mid-cap segment but at the cost of including some lower-quality companies by earnings-based definitions.
From a practical benchmarking perspective, the two indexes are often used interchangeably in discussions of mid-cap performance, but they can diverge significantly in specific periods when sector dynamics or company-quality factors drive performance. Investors choosing between them as a benchmark should consider whether the Russell Midcap's exhaustive coverage or the S&P 400's quality screen better matches their investment criteria.
Sector Profile
The sector composition of the Russell Midcap tends to be more balanced than mega-cap or top-200 indexes because the Midcap spans a wider range of industries without the concentration that comes from a handful of very large technology or consumer companies dominating by market weight. Mid-cap companies across industrials, health care, financials, consumer discretionary, real estate, and information technology can all carry meaningful weight in the index without any single sector overwhelming the others.
This relative balance reflects the nature of the mid-cap tier: successful companies at this size can be found across the full range of industries, whereas the very largest companies in the U.S. equity market have historically been concentrated in technology and consumer sectors. The more even sector distribution in the Midcap gives it different factor exposure than mega-cap or all-cap indexes, which can make it an attractive complement in a diversified equity portfolio.
Sector weights in the Russell Midcap change each year at reconstitution as companies migrate between size tiers and as new companies enter from the Russell 2000. FTSE Russell publishes current sector data regularly. Investors should review current sector composition rather than relying on historical averages, as the mix can shift meaningfully in years with substantial sector-specific IPO activity or when broad sector valuation changes affect the relative size ranking of mid-cap companies.
Return Variants and Style Sub-Indexes
FTSE Russell publishes the Russell Midcap in price return, total return, and net total return variants, consistent with the broader Russell US index family. The total return variant, which reinvests dividends at the ex-dividend date, is the standard basis for most performance comparisons. Mid-cap companies tend to pay moderate dividends, so the spread between price and total return is meaningful over holding periods of several years but less dramatic than in high-dividend segments such as utilities or REITs.
FTSE Russell also maintains the Russell Midcap Growth Index and the Russell Midcap Value Index as style sub-indexes. These are constructed using the same composite growth and value scoring methodology applied across the broader Russell family, combining I/B/E/S earnings growth forecasts, sales per share growth, and price momentum for the growth score, and book-to-price ratio for the value score. Mid-cap companies near the style boundary can receive partial weights in both sub-indexes simultaneously, so the Growth and Value sub-indexes sum to the full Russell Midcap when combined by market weight.
The style sub-indexes allow investors to express mid-cap growth or value tilts using a benchmark that is consistent with the Russell methodology applied at other size tiers. An investor who holds Russell 2000 Value and Russell Midcap Value together, for example, has a composite small and mid-cap value exposure benchmarked consistently against FTSE Russell's style definitions across the size spectrum.
Frequently asked questions
What is the Russell Midcap Index?
The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 by market capitalization. Because the Russell 1000 represents the 1,000 largest stocks in the Russell 3000, the Midcap Index captures the lower end of the large-cap tier, which corresponds to what many investors and data providers refer to as the mid-cap segment of the U.S. equity market.
How is the Russell Midcap carved out of the Russell 1000?
FTSE Russell ranks all Russell 1000 constituents by market capitalization and designates the bottom 800 as the Russell Midcap Index. The top 200 largest companies in the Russell 1000 form the Russell Top 200 large-cap index. The two groups are mutually exclusive, and together they account for all Russell 1000 constituents. FTSE Russell weights each Midcap constituent by float-adjusted market capitalization.
How does the Russell Midcap differ from the S&P MidCap 400?
The Russell Midcap and S&P MidCap 400 both target the mid-cap segment of the U.S. equity market but use different methodologies. The Russell Midcap is defined as the bottom 800 of the Russell 1000 using a fully rules-based ranking with no selection committee. The S&P MidCap 400 uses a committee-based selection process that applies profitability and liquidity screens. The two indexes overlap substantially but will differ at the edges based on these distinct approaches.
Does the Russell Midcap have style sub-indexes?
Yes. FTSE Russell offers the Russell Midcap Growth Index and the Russell Midcap Value Index as style sub-indexes of the Russell Midcap. Each constituent of the Russell Midcap receives a growth score and a value score, and the style sub-indexes allocate weights accordingly. Companies near the style boundary can receive partial weights in both the Growth and Value sub-indexes simultaneously.
When is the Russell Midcap Index reconstituted?
FTSE Russell reconstitutes the Russell Midcap each June as part of its annual Russell US index reconstitution cycle. Changes take effect at the end of June. The reconstitution process re-ranks the entire Russell 3000 universe, which determines which stocks belong in the Russell 1000 and, within that, which 800 fall into the Midcap Index.