Finance & economics | Buttonwood

Why investors have fallen in love with small American firms

The Russell 2000 puts in a historic performance

 Illustration of a hand with the index finger pointing up, wearing a small red baseball cap on the tip of the finger, set against a pink background.
Illustration: Satoshi Kambayashi

Believe it or not, corporate America still makes room for the little guy. Around half of working Americans are employed by a firm with less than 500 workers. Nine in ten banks are community institutions that hold less than $10bn in assets. This rather parochial picture, however, is not reflected in the country’s stockmarket, where the falling number of public companies and extreme concentration of value are a concern. Among America’s 3,000 largest public firms, the biggest 1,000 account for 95% of total value. The next 2,000, which form the Russell 2000 index, are collectively worth less than Apple, the world’s most valuable company.

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This article appeared in the Finance & economics section of the print edition under the headline “Cap and trade”

From the July 20th 2024 edition

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