Russell 1000 Index Guide for Australians: 2025 Trends & Strategies

The Russell 1000 Index is one of the most influential benchmarks for large-cap US equities, tracking approximately the largest 1,000 companies in America. As we move through 2025, the Russell 1000 remains a vital reference for global investors—including Australians seeking international diversification. With recent policy changes, market shifts, and evolving ETF products, understanding the Russell 1000’s role has never been more relevant for Australian portfolios.

What Is the Russell 1000 Index?

Launched in 1984, the Russell 1000 Index comprises the 1,000 largest US-listed companies by market capitalisation. It captures over 90% of the US equity market’s total value, including blue-chip giants like Apple, Microsoft, and Amazon, as well as rising stars in technology, healthcare, and consumer goods. The index is market-cap weighted, so the largest companies have the greatest impact on performance.

• Coverage: Approximately $40 trillion in market value as of 2025
• Sector mix: Heavily weighted to technology, healthcare, consumer discretionary, and financials
• Updated annually: The index is reconstituted each June, with the 2025 rebalancing reflecting shifts in market leadership and sector dynamics

For Australian investors, the Russell 1000 offers a broad, diversified window into the US economy’s largest and most resilient companies.

2025 Performance & Policy Updates: What’s New?

2025 has brought several developments impacting the Russell 1000 Index and its relevance to international investors:

• Strong tech rebound: After a volatile 2022–2023, the US tech sector roared back in 2024 and continued its momentum into 2025. The index’s heavy tech weighting helped drive double-digit returns year-to-date.
• Interest rate pivots: With the US Federal Reserve signalling the first rate cuts in mid-2025, large-cap growth stocks—especially in tech and healthcare—saw renewed investor interest, boosting the Russell 1000’s performance relative to small-cap indices.
• Policy changes: The US SEC’s new regulations on climate-related disclosures and ESG reporting have influenced the index’s sector composition, with companies leading in sustainability seeing increased flows.
• Index reconstitution: The June 2025 annual rebalancing saw several high-profile IPOs and market cap shifts—such as the inclusion of new AI and clean energy leaders—reshaping the top holdings list.

Example: In the June 2025 reconstitution, a US-based AI chip designer entered the top 50, reflecting the ongoing impact of AI innovation on US equity markets.

How Can Australians Access and Use the Russell 1000?

While the Russell 1000 is a US index, Australian investors have several ways to gain exposure:

• ETFs: Products like the iShares Russell 1000 ETF (NYSE: IWB) and other US-listed funds are accessible via many Australian brokers offering international trading. Some ASX-listed ETFs offer indirect exposure through US total market or S&P 500 products, which overlap heavily with the Russell 1000.
• Managed funds: Many global managed funds available in Australia include the Russell 1000 as a benchmark or core portfolio holding.
• Superannuation: Some self-managed super funds (SMSFs) and retail super platforms now allow direct investment in US ETFs or managed funds tracking the Russell 1000.

When considering US equity exposure, Australians should factor in currency risk, tax implications (such as US withholding tax on dividends), and the importance of diversification beyond the ASX.

Is the Russell 1000 Right for Your Portfolio?

The Russell 1000’s broad scope and focus on large, established companies make it an attractive option for Australians seeking growth, stability, and diversification outside the local market. The index’s 2025 outlook remains strong, driven by the US’s global tech leadership and resilient consumer and healthcare sectors. However, investors should be mindful of sector concentration, currency fluctuations, and global economic headwinds.

Ultimately, the Russell 1000 can serve as a core building block for a diversified, future-ready investment portfolio.