Case study Choosing an index is an active decision
Explore similarities and differences between the S&P 500® Index and the Russell 3000® Index.
Capabilities Institutional Indexing
Your destination for index portfolio management to help you meet your investment goals.
Platform highlights
Utilizing a variety of replication methodologies, Invesco currently manages $1.03T across 475+ index-based solutions spanning traditional and alternative asset classes, regions, sectors, and factors. We provide our clients with a wide array of access points, including institutional and retail pooled structures, insurance wrappers, separately managed accounts and exchange traded, and many more.
Analytics
Proprietary investment tools to help investors achieve targeted portfolio outcomes.
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Tailored solutions using single and multi-indices packaged solutions through client’s vehicle of choice.
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Access to firm-wide experts across investment disciplines.
$1.03T
across 475+ index-based solutions
As of December 31, 2025
$916B
in global equity assets across 322 index-based solutions
140+
dedicated professionals globally
Client success stories
Learn how institutional investors are meeting their desired investment outcomes with index-based solutions.
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Transcript
Invesco takes an active approach to its passive investments, ensuring our clients have a solid understanding of their benchmark properties, behavior, and drivers of return. In a recent client engagement, we provided a deeper look into two well-known US equity indexes, the Russell 3000 and the S&P 500. While both share a market-cap-weighting methodology and similar long-term performance, differences exist, making the case that investors can benefit from evaluating their index exposure.
Now let's dive into the top similarities and differences between the two indexes. Historically, the performance of both indexes is barely distinguishable. The mid and small-cap securities in the Russell 3000 do not explain much of the index's performance, despite its being an all-cap index. Although both indexes rely on a market-cap-weighting approach, the S&P 500 deploys a subjective committee for security inclusion, whereas the Russell 3000 utilizes a more objective rules-based methodology.
Despite the inclusion of both small and mid caps in the Russell 3000, both indexes have a similar market-cap composition, which is large cap, given the weighting methodology. For investors who value the importance of small-cap securities as a driver of return or diversification, a dedicated small cap mandate may be additive.
Relative to the Russell 3000, the S&P 500 is more concentrated, given its lower number of index constituents. While both the Russell 3000 and the S&P 500 have a comparable index construction methodology and share similarities across the risk and return spectrum, the weighting mechanisms of stocks included in each index may position clients to be overly exposed to large-cap companies. Investors who are looking to diversify their market exposure should seek a more balanced mix of large, mid, and small-cap companies through other index exposures.
Our team can support your organization's efforts to find diversifying, return-enhancing, or risk-reducing strategies to complement your existing passive US large-cap exposure. For more information, please visit invesco.com/institutional-indexing, or speak with your Invesco representative.
