--- title: "Russell 2000 Small-Cap Annual Returns" description: "Russell 2000 small-cap index annual returns history 1990-2024. Track the size premium, small-cap volatility, and how the index compares to S&P 500 large-cap." canonical: https://www.getswoopr.com/tables/returns/russell-2000-annual-returns/ source: "Swoopr Investment: https://www.getswoopr.com" --- ## Direct Answer > The Russell 2000 tracks approximately 2,000 small-cap U.S. stocks (companies ranked approximately 1,001 to 3,000 by market cap). Small-cap stocks have historically outperformed large-caps over long periods (the "size premium"), but with significantly higher volatility. The Russell 2000 gained +47.2% in 2003 and fell −34.8% in 2008. Average annual return since inception (1978) is approximately 10-11%. # Russell 2000 Small-Cap Index Annual Returns History ## Russell 2000 Annual Returns, 1990-2024 | Year | Annual Return | | --- | --- | | 1990 | -19.5% | | 1991 | +46.1% | | 1992 | +18.4% | | 1993 | +18.9% | | 1994 | -1.8% | | 1995 | +28.5% | | 1996 | +16.5% | | 1997 | +22.4% | | 1998 | -2.6% | | 1999 | +21.3% | | 2000 | -3.0% | | 2001 | +2.5% | | 2002 | -20.5% | | 2003 | +47.2% | | 2004 | +18.3% | | 2005 | +4.6% | | 2006 | +18.4% | | 2007 | -1.6% | | 2008 | -34.8% | | 2009 | +27.2% | | 2010 | +26.9% | | 2011 | -4.2% | | 2012 | +16.3% | | 2013 | +38.8% | | 2014 | +4.9% | | 2015 | -4.4% | | 2016 | +21.3% | | 2017 | +14.6% | | 2018 | -11.0% | | 2019 | +25.5% | | 2020 | +19.9% | | 2021 | +14.8% | | 2022 | -21.6% | | 2023 | +16.9% | | 2024 est. | +10% | Source: [FTSE Russell: Russell US Indexes](https://www.ftserussell.com/products/indices/russell-us). Data through 2024; last checked September 2026. ## Frequently asked questions Why do small-cap stocks have higher long-term returns? The "size premium" (small-cap outperformance) has been documented in academic research since Banz (1981) and is a cornerstone of factor investing. Explanations: (1) small companies are riskier (less access to capital, less diversified revenue, more cyclical, higher probability of failure), and investors demand a risk premium; (2) small companies have more room to grow relative to large companies that already dominate their markets; (3) small-cap stocks are less widely analyzed, creating more opportunities for mispricing that active and systematic investors can exploit. The premium has been inconsistent: 2007-2024 saw significant periods of large-cap outperformance, especially post-2017 as mega-cap technology dominated S&P 500 returns. How does the Russell 2000 composition differ from the S&P 500? The Russell 2000 contains approximately 2,000 stocks with market caps roughly in the $300M-$2B range. The S&P 500 contains 500 stocks with market caps generally above $10B. Key differences: (1) sector composition -- Russell 2000 has higher weight in financials (small regional banks), healthcare (small biotech), industrials; S&P 500 has higher technology weight; (2) profitability -- many Russell 2000 companies are unprofitable (especially biotech); S&P 500 companies are generally profitable; (3) domestic revenue -- small-caps derive approximately 75-80% of revenue domestically vs. S&P 500's approximately 55-60%, making Russell 2000 more sensitive to the U.S. domestic economy and less to global growth. Does the size premium still exist? The small-cap size premium has been contested since the mid-1990s when it was first published. From 2007-2024, the S&P 500 (large-cap) outperformed the Russell 2000 (small-cap) in most years, reversed only in 2016, 2020, and 2024. Academic debate: some researchers argue the original premium was a data-mining artifact; others argue it remains but requires sorting by profitability (profitable small-caps earn the premium; unprofitable ones don't). A "quality small-cap" approach (e.g., XSVM, IWN value tilt) has had better results than broad small-cap. The premium also varies significantly by economic regime: small-caps outperform during early-cycle recovery (2003, 2009, 2016) and underperform during late-cycle tech-dominated bull markets. ## Worked Example: Through the 2008 Loss, and the Average That Hides It Put $10,000 into the index at the start of 2008. The year's -34.8% leaves $6,520; 2009's +27.2% takes it to $8,293 and 2010's +26.9% to $10,524, back above the start only at the end of the third year. Two consecutive gains of about 27% were needed to repair one loss of about 35%, because the gains compound from the smaller base: the required recovery after a 34.8% fall is 53%. Across the 34 completed years in the table, 1990 to 2023, the arithmetic average of the annual returns is 10.7%, but the compound return an investor actually earned is 9.0% a year; $10,000 at the start of 1990 becomes $188,751 by the end of 2023. The gap between the two averages, 1.7 points a year, is the cost of the index's volatility, and it is wider than the same gap for large-cap or bond indexes because the swings in this column are larger. Nine of the 34 years were negative. ## Cite This Page If you reference this table in your own work, use the following citation format and add the date you accessed it: > Swoopr Editorial Team. (2026). *Russell 2000 Small-Cap Index Annual Returns History*. Swoopr Investment. [https://www.getswoopr.com/tables/returns/russell-2000-annual-returns/](https://www.getswoopr.com/tables/returns/russell-2000-annual-returns/) Check the figures against the primary sources listed under References before you rely on or republish them; the series they come from are revised. ## References - [FTSE Russell: Russell US Indexes](https://www.ftserussell.com/products/indices/russell-us) [Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/) produces independent investment education and research content. Corrections: [corrections policy](https://www.getswoopr.com/legal/corrections-policy/). Standards: [editorial standards](https://www.getswoopr.com/legal/editorial-policy/).