Meme stock mania has been mighty kind to the small-cap Russell 2000 Index after its reconstitution last June.
The total market capitalization of the Russell 2000 Index surged 84% from last year’s reconstitution (or the addition and subtraction of new companies to the index) to $3.5 trillion, FTSE Russell said in weekend tweet. This year alone, the Russell 2000 is up more than 16% compared to a 12% gain for the S&P 500.
"In 2020, overall capitalization for the U.S. equity market stayed fairly flat, decreasing by 1%. However, we’ve seen a surge in growth in the first half of 2021 with the total market cap in the Russell 1000 reaching $44.1 trillion. We have also seen a resurgence in market capitalizations of small cap companies in the Russell 2000 reflecting the overall bounce back of U.S. equity markets following the COVID-19 recession in early 2020," said FTSE Russell CEO Arne Staal.
To be sure, the index has been powered by massive gains in popular stocks among a new army of retail trades such as AMC (AMC) and GameStop (GME).
AMC shares have gained more than 700% in one-year's time, giving the money-losing movie theater chain a whopping $25 billion market cap. As for struggling GameStop, its stock has exploded 4,900% over the past year — it now sports a lofty $17.6 billion market cap.