Dow Jones US Total Market Index - Explained
What is the Dow Jones US Total Market Index?
Written by Jason Gordon
Updated at April 17th, 2022
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Table of Contents
What is the Dow Jones U.S. Total Market Index?How Does the Dow Jones US Total Market Indices Work?Academic Research on Dow Jones U.S. Total Market IndexWhat is the Dow Jones U.S. Total Market Index?
Dow Jones U.S. Total Market Index is a Market-capitalization weighted index providing readily available prices and price changes in the shares of the US-based corporations listed on the New York Stock Exchange, American Stock Exchange, and NASDAQ Stock market. It is a total market index covering the top 95% of the US stocks. It includes all the US stocks except very small companies and the least-liquid US stocks.
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How Does the Dow Jones US Total Market Indices Work?
The index is maintained by Dow Jones indexes which are named after its founder Charles Dow and his partner Edward Jones. It is a very broad index covering all types of industries in the U.S. The Dow Jones U.S Total Market Index is comprised of the Dow Jones large-cap, mid-cap, small-cap, value and growth indexes. The total index is divided into several sub-indexes each for tracking the trend of different segments of the market according to size, sector or type of business. The aim of developing the index is to provide transparent and correct information on the US equity stock market with readily available price list. There are about 3,650 stocks included in this index including large-cap, mid-cap, small-cap and micro-cap companies. Foreign securities, exchange-traded products or other investments companies are not listed on this index. It is considered to be highly reliable index reflecting U.S share market and followed worldwide. The other such indexes are Wilshire 5000 Total Market Index and the CRSP US Total Market Index. All of these are Market-capitalization weighted and float-adjusted. The indexes are very useful in understanding the trend of the US stock market and provide a general picture of the market.