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. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Common Stock Fund

    A mutual fund that invests in the common stock of numerous publicly ...
  3. Russell 2000 Index

    An index measuring the performance approximately 2,000 small-cap ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  5. Broad-Based Index

    An index designed to reflect the movement of the entire market. ...
  6. Wilshire 5000 Total Market Index ...

    A market capitalization-weighted index composed of more than ...
Related Articles
  1. Insurance

    Investing Beyond Your Borders

    Investing abroad poses risks, but can also help you diversify. Discover ways to invest in foreign stocks.
  2. Investing Basics

    Introduction To Investment Diversification

    Reducing risk and increasing returns in your portfolio is all about finding the right balance.
  3. Mutual Funds & ETFs

    Enhanced Index Funds: Can They Deliver Low-Risk Returns?

    These funds may look appealing. Find out whether they can really live up to all of their promises.
  4. Retirement

    A Brief History Of The Mutual Fund

    This popular investment vehicle has seen its share of ups and downs, successes and scandals. Read all about it!
  5. Mutual Funds & ETFs

    How To Choose The Right ETF?

    Choosing the right ETF really isn’t that complicated. If you stay focused on a few key areas, you may find the experience to be much easier.
  6. Chart Advisor

    ChartAdvisor for March 27 2015

    A weekly technical summary of the major U.S. indexes.
  7. Chart Advisor

    Is Now the Time to Invest in North America?

    Bullish chart patterns across the North American markets suggest that now might actually be a wise time to allocate closer to home.
  8. Mutual Funds & ETFs

    Want to Go Long Natural Gas? Eye the UGAZ ETN

    Is UGAZ the best way to play natural gas? Maybe not.
  9. Mutual Funds & ETFs

    How ETF Arbitrage Works

    ETF arbitrage brings the market price of ETFs back in line with net asset values when divergence happens. But how does ETF arbitrage work?
  10. Mutual Funds & ETFs

    Want Emerging Market REIT Exposure? Eye These ETFs

    It's possible (and easy) to invest in emerging market real estate from the United States — just look at these REIT ETFs.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center