Content courtesy of Dimensional Fund Advisors. The author is Wes Crill, PhD, Senior Client Solutions Director and Vice President.
Irregular rebalancing often causes style drift in indices. Occasionally, this results in holdings that are far removed from the intended asset category. As its June rebalance date draws near, the Russell 2000 Index has a size outlier as out of place as Big Bird in the boardroom meeting meme.
The index’s largest constituent, Bloom Energy, has a market cap of $81 billion.¹ That accounts for 1.82% of the index,² which is potentially a big hurdle for Russell 2000 Index fund investors looking to capture the performance of US small cap stocks.
A lot can happen in a year—the constraints enforced by index maintenance schedules can make it challenging for investors to get what they’re expecting out of index funds.
Holdings are plotted based on stock characteristics and are subject to change. This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security. Named securities may be held in accounts managed by Dimensional. Source: Dimensional and Russell. Frank Russell company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes.
Footnotes
¹ Market capitalization as of May 29, 2026. Data from FactSet. With an $81 billion market cap, Bloom Energy would be the 151st largest stock in the large cap Russell 1000 Index.
² Based on holdings for the iShares Russell 2000 Index ETF as of May 29, 2026.
Glossary
Style Drift: When an investor’s portfolio deviates over time from its investment objective or targeted asset category.
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