The U.S. stock market is often discussed through a handful of well-known benchmarks. Most people have heard of the S&P 500 or the Dow Jones Industrial Average, but there is another important index that receives far less attention while still playing a crucial role in how investors understand the market: the Dow Jones U.S. Completion Total Stock Market Index.
Despite its long name, the idea behind this index is simple—and extremely useful. It represents the part of the U.S. stock market that the S&P 500 leaves out. For investors who want exposure to the full breadth of American companies, this index fills in the missing pieces.
This article explores what the index is, how it works, why it exists, and how investors use it in real portfolios.
Understanding the Basics
At its core, the Dow Jones U.S. Completion Total Stock Market Index tracks U.S. companies that are not included in the S&P 500. (S&P Global)
That means it primarily contains:
- Mid-cap companies
- Small-cap companies
- Emerging public companies
- Firms that are still growing into large-cap status
When combined with the S&P 500, the index essentially helps recreate the entire U.S. stock market.
A Simple Way to Think About It
Imagine the U.S. stock market as a huge puzzle:
- The S&P 500 represents the biggest, most established corporations.
- The Completion Index represents everything else.
Put them together, and you get something very close to the full market.
This is exactly how many institutional portfolios are constructed.
Why the Index Was Created
Large-cap companies dominate financial headlines, but they don’t represent the entire economy. The S&P 500 alone covers about 80% of total U.S. stock market value.
That still leaves thousands of companies unaccounted for.
Index providers created the Completion Index to:
- Capture the remaining market.
- Provide a benchmark for mid- and small-cap performance.
- Allow investors to replicate the total market efficiently.
The index itself dates back to 1987, making it one of the long-standing benchmarks for extended U.S. equities. (S&P Global)
How the Index Works
1. Market Coverage
The index is part of the broader Dow Jones U.S. Total Stock Market Index family.
Here is how the hierarchy works:
| Index | What it Tracks |
|---|---|
| Dow Jones U.S. Total Stock Market | Entire U.S. equity market |
| S&P 500 | Largest U.S. companies |
| Dow Jones U.S. Completion | Everything outside the S&P 500 |
This structure allows investors to mix and match exposure depending on their strategy.
2. Weighting Method
The index uses float-adjusted market capitalization weighting. (S&P Global)
In simple terms:
- Larger companies carry more influence.
- Smaller companies still matter but have smaller weights.
For example:
If a mid-cap firm grows rapidly and its market value increases, its weight inside the index rises automatically.
This system allows the index to evolve with the market.
3. Types of Companies Included
Most of the companies in the index fall into two categories:
Mid-Cap Companies
These firms are often established businesses still expanding.
Examples of typical sectors:
- Regional banks
- industrial manufacturers
- software companies scaling globally
Small-Cap Companies
These companies are usually earlier in their lifecycle.
They tend to offer:
- Higher growth potential
- Greater volatility
- More sensitivity to economic cycles
Because of this composition, the Completion Index is often seen as a growth engine within diversified portfolios.
Why Investors Pay Attention to This Index
Although it isn’t as famous as the S&P 500, professional investors track it closely.
There are several reasons.
1. It Shows the “Rest of the Market”
Large tech giants can dominate the S&P 500. The Completion Index provides insight into:
- Smaller innovators
- niche industries
- regional companies
When smaller stocks start outperforming large ones, analysts often notice it first here.
This is sometimes called market broadening.
2. It Helps Build Total Market Funds
Many popular ETFs and retirement funds combine two indexes:
- S&P 500
- Completion Index
Together they replicate the entire U.S. market.
This approach is common among:
- pension funds
- retirement plans
- institutional portfolios
3. Benchmark for Small-Cap Investing
Before this index became widely used, investors often relied on alternatives like the Wilshire 4500 Completion Index.
Over time, the Dow Jones version became a widely adopted benchmark, including in government retirement funds. (Wikipedia)
Performance Characteristics
Because it focuses on smaller companies, the Completion Index behaves differently than large-cap benchmarks.
Recent data shows:
- Around 15% one-year return in recent periods. (S&P Global)
- Higher volatility than the S&P 500.
Long-Term Behavior
Historically, small and mid-cap stocks:
- outperform during economic recoveries
- lag during recessions
- show higher growth over long periods
This pattern makes the index a valuable diversification tool.
Real-World Example
Let’s imagine two investors:
Investor A
Invests only in the S&P 500.
Investor B
Invests in:
- S&P 500
- Dow Jones Completion Index
Investor B now owns:
- Large tech firms
- Mid-sized industrial companies
- small regional businesses
- emerging innovators
In other words, they effectively own the entire U.S. economy.
This difference can be significant over decades.
What Sectors Dominate the Index
Because mega-cap tech companies are excluded, the sector mix looks different.
Common heavyweights include:
- Industrials
- Financial services
- Consumer discretionary
- Healthcare innovators
- emerging technology firms
This creates a very different risk profile compared to large-cap indexes dominated by global tech giants.
Risks and Limitations
No index is perfect, and the Completion Index comes with its own challenges.
Higher Volatility
Small companies tend to fluctuate more during market cycles.
Liquidity Differences
Some smaller stocks trade less frequently.
Economic Sensitivity
Small-cap firms are often more affected by:
- interest rates
- credit conditions
- domestic economic growth
However, these same factors can also drive strong upside during expansions.
Why Financial Advisors Use It
Financial professionals frequently use the index when building diversified portfolios.
Typical strategy:
Core Allocation
- S&P 500
Extended Market Allocation
- Completion Index
Benefits include:
- fuller market coverage
- improved diversification
- exposure to faster-growing companies
This method is widely used in index-based investing strategies.
The Role in Modern Index Investing
Index investing has transformed how people build wealth.
Instead of trying to pick individual stocks, investors now often buy broad market exposure.
The Completion Index plays an important role in that philosophy.
It ensures investors aren’t only buying the biggest companies—but also the next generation of leaders.
Many of today’s giants once lived inside indexes like this before joining the S&P 500.
Key Takeaways
The Dow Jones U.S. Completion Total Stock Market Index may not dominate financial headlines, but it is a vital piece of the investment ecosystem.
It:
- Tracks U.S. companies outside the S&P 500
- focuses largely on mid-cap and small-cap stocks
- helps investors recreate the entire U.S. stock market
- serves as a benchmark for extended market funds
- provides diversification beyond mega-cap companies
For investors who want a deeper understanding of the market—or who want to invest in more than just the largest corporations—this index is incredibly valuable.
Final Thoughts
The story of the stock market isn’t just about the biggest names. Beneath the giants lies a vast universe of growing companies shaping the future economy.
That universe is exactly what the Dow Jones U.S. Completion Total Stock Market Index captures.
Think of it as the hidden half of the market—less famous, often more dynamic, and essential for anyone who wants a truly complete view of U.S. equities.