Total Stock Fund

AAA

DEFINITION of 'Total Stock Fund'

A mutual fund or ETF that seeks to replicate the broad market by holding the stock of every security that trades on a certain exchange, invests in a certain country, or passes basic thresholds of size (market cap) or trading volume. Total stock funds, also called total stock market index funds or total market funds, may track a broad index such as the Wilshire 5000, Russell 2000 or MSCI U.S. Broad Market.

INVESTOPEDIA EXPLAINS 'Total Stock Fund'

These super-broad index funds tend to have less volatility than even large indexes like the S&P 500 just because they hold so many companies' stock. Most total stock funds will have portfolio weightings based in some way on market cap, but they are not necessarily just market-cap weighted, like the S&P 500 is.

Total stock funds may not capture a full 100% of the market capitalization of their target market (such as the whole United States or all small-cap stocks), but they are usually able to capture 95% or more by owning the first few thousand stocks in order of market capitalization.

One of the largest and oldest total stock funds is the Vanguard Total Stock Market Index Fund, which has nearly $100 billion in assets and owns the 1,300 largest companies that trade on the NYSE, AMEX and Nasdaq.

RELATED TERMS
  1. Common Stock Fund

    A mutual fund that invests in the common stock of numerous publicly ...
  2. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  3. Wilshire 5000 Total Market Index ...

    A market capitalization-weighted index composed of more than ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  5. Russell 2000 Index

    An index measuring the performance approximately 2,000 small-cap ...
  6. Broad-Based Index

    An index designed to reflect the movement of the entire market. ...
Related Articles
  1. Insurance

    Investing Beyond Your Borders

  2. Investing Basics

    Introduction To Investment Diversification

  3. Mutual Funds & ETFs

    Enhanced Index Funds: Can They Deliver ...

  4. Retirement

    A Brief History Of The Mutual Fund

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center