What is the Dow Jones U.S. Total Market Index?

The Dow Jones U.S. Total Market Index (DWCF) is a market-capitalization-weighted index Dow Jones Indexes maintains that provides broad-based coverage of the U.S. stock market. The Dow Jones U.S. Market Index, considered a total market index, represents the top 95% of the U.S. stock market based on market capitalization. 

Key Takeaways

  • The Dow Jones U.S. Market Index (DWCF) is a total market index that represents the top 95% of the U.S. stock market based on market capitalization.
  • The DWCF includes about 3,650 US stocks that trade on the U.S. stock exchanges.
  • The index does not include foreign securities, exchange-traded products, or other investment companies.

Understanding the Dow Jones U.S. Total Market Index

The Dow Jones U.S. Total Market Index is also known as the "Dow Jones U.S. Index." The index includes most stocks, except the very smallest and least-liquid U.S. stocks. The Dow Jones large-cap, mid-cap, small-cap, value, and growth indexes are constructed from the stock constituents of the Dow Jones U.S. Total Market Index.

As an extremely broad index, the fund is further sliced by Dow Jones to create distinct sub-indexes that track every major segment of the market, according to stock size, sector, and others. All of the indexes are created and maintained according to an objective and transparent methodology with the fundamental aim of providing reliable, accurate measures of U.S. equity performance.

Added up, the Dow Jones U.S. Total Market Index includes about 3,650 US stocks that trade on the U.S. stock exchanges; it includes large-, mid-, small- and micro-cap companies. The number does not include foreign securities, exchange-traded products, or other investment companies.

Broad market indexes are not always total market indexes. For instance, that can leave out many micro-cap stocks, which are the smallest companies that trade on stock exchanges. 

The DWCF vs Other Broad Market Indexes

Broad market indexes only include securities with reasonable size and liquidity so that they can be purchased in an institutional size portfolio. Many micro-cap securities don’t trade with enough volume to be efficiently included in products such as index funds and exchange-traded funds (ETF).

The other most prominent total market indexes besides the Dow Jones U.S. Total Market Index include the Wilshire 5000 Total Market Index and the CRSP US Total Market Index. All three indexes are float-adjusted and capitalization-weighted.

Named for the nearly 5,000 stocks it contained at launch, the Wilshire 5000 Total Market Index (TMWX) is a broad-based market capitalization-weighted index composed of 3,451 publicly traded companies that meet the following criteria: it is a U.S. based company; listed on a U.S. stock exchange; with publicly available stock pricing data. The Wilshire 5000 remains the most often used benchmark for the total U.S. equity market.

The Russell 3000 Index is another market-capitalization-weighted equity index maintained by FTSE Russell that provides exposure to the entire U.S. stock market. The index tracks the performance of the 3,000 largest U.S.-traded stocks which represent about 98% of all U.S incorporated equity securities.  

The DWCF as a Research Tool

Indexes, like the Dow Jones U.S. Total Market Index, provide useful information and insight, like making it easier to understand past trends and changes in investing patterns. Indexes provide a helpful benchmark for making all types of comparisons, and also provide snapshots of trends, though not a detailed picture.

Indexes react to actual trades, and while investors may trade on the expectation of good or bad news, indexes are mathematical calculations that have nothing to do with emotion. In that respect, stock indexes may be more valuable for providing a historical perspective than they are a means of forecasting future market movement. They can be especially useful for spotting long-term trends.