The Russell 2000® Index has been overwhelmingly embraced as the small cap index of choice for measuring the small cap market segment and serving as the basis for the creation of small cap investment products.
The potential long-term benefits of including small cap stocks as part of a diversified, multi-asset portfolio have been well documented by numerous academic researchers and industry practitioners. A wide body of research has shown that small cap stocks have distinct risk/return characteristics that can increase portfolio diversification and can boost potential returns over time.
Securities lending programs, based on highly liquid products replicating the small cap indices, such as exchange-traded funds (ETFs) or the individual stocks within the index, may offer market participants an additional lending yield while some ETF issuers have used securities lending income to offset management fees, enhancing fund returns net-of-fees.
