Total Stock Market Funds: Owning the Whole US Market
A total market fund adds thousands of smaller companies to the large ones — and behaves almost identically anyway.
At a glance
Figures checked 1 Sep 2026
What to take away
- Holds effectively every investable US public company, weighted by size.
- Because weighting is by size, large companies still dominate the return.
- Correlation with the S&P 500 is very high — do not hold both expecting diversification.
A total market fund holds several thousand US companies weighted by market capitalisation. The largest few dozen make up a large share of the index, which is why its returns track the S&P 500 closely despite holding far more names.
Does the extra exposure help?
Over long periods the difference between a total market fund and an S&P 500 fund has been small. Small-caps behave differently in some cycles, which adds a little diversification, but you should not expect a materially different outcome.
Holding both a total market fund and an S&P 500 fund is duplication, not diversification. Pick one as the US core.
Common questions
No. US total market means US-domiciled companies. International exposure needs a separate fund.