Total-Market vs. S&P 500

The difference between a total US market fund and an S&P 500 fund, how small companies and the Nasdaq-100 compare, and real returns over 1, 10 and 20 years.

Two ways to own America

The two most popular ways to own US stocks are an S&P 500 fund and a total-market fund. An S&P 500 fund holds large US companies chosen by a committee using size, profit and other rules. A total-market fund holds large, medium and small US companies together, covering nearly all publicly traded US stocks.

Because both are market-cap weighted, the same giant companies dominate both. Large companies make up the vast majority of a total-market fund’s value, so the two funds usually move very similarly.

Giant companies dominate both funds, which is why they move so closely together.

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