Russell 2000 Index + Dow Jones Completion Index?

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Austex1
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Russell 2000 Index + Dow Jones Completion Index?

Post by Austex1 »

For my US equities, I currently have S&P 500, and a fund that tracks the Russell 2000, plus a fund that tracks the Dow Jones Completion Index. Is there any benefit to holding the Russell 2000 fund or does it totally overlap the completion fund?

Thanks for your thoughts. (This is in my 401K, so I can't just get a total stock market fund).
DSInvestor
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by DSInvestor »

S&P500 fund is close enough IMO.
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Austex1
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by Austex1 »

DSInvestor wrote:S&P500 fund is close enough IMO.
Thanks, but I definitely want more than S&P 500 to maximize diversification and include small and mid-caps. I'm just wondering whether the completion index alone covers everything or whether there is any added benefit to also holding the Russell 2000 fund.
555
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by 555 »

What exactly is "Dow Jones Completion Index"?
lack_ey
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by lack_ey »

That probably means the S&P completion index. The "stuff that's not in the S&P 500" fund. Vanguard's version is called the extended market index fund (VEXMX, VEXAX, VXF), if you're familiar with that. Many companies have their own.

These days various related indexes are under the S&P Dow Jones indexes umbrella. There's some kind of joint venture, hence the shared name.

There should be very heavy overlap between the Russell 2000 and a completion index fund.
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Austex1
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by Austex1 »

It is a fund that is supposed to complete market other than S&P 500. Does a Russell 2000 fund add anything?
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by LadyGeek »

555 wrote:What exactly is "Dow Jones Completion Index"?
It's an index used for this: Extended market index fund

Here's the Fact sheet, from S&P Dow Jones Indices » Literature Center
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DSInvestor
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by DSInvestor »

Austex1 wrote:It is a fund that is supposed to complete market other than S&P 500. Does a Russell 2000 fund add anything?
S&P Completion index includes every US stock that is not in the S&P 500. Assuming the Dow Jones Completion index fund in your 401k tracks that index, you can use that along with S&P 500 to approximate Total Stock Market. Russell 2000 would not be required.

A quick run of M* Instant X-Ray suggests that an 80/20 mix of 500 Index (VFINX) / Extended Market (VEXMX) would come very close to approximating TSM (VTSMX).
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Austex1
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by Austex1 »

Thank you!
555
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by 555 »

Well in that case, if Dow Jones Completion Index just equals Extended Market Index, then the answer's been given, e.g. this.
DSInvestor wrote:
Austex1 wrote:It is a fund that is supposed to complete market other than S&P 500. Does a Russell 2000 fund add anything?
S&P Completion index includes every US stock that is not in the S&P 500. Assuming the Dow Jones Completion index fund in your 401k tracks that index, you can use that along with S&P 500 to approximate Total Stock Market. Russell 2000 would not be required.

A quick run of M* Instant X-Ray suggests that an 80/20 mix of 500 Index (VFINX) / Extended Market (VEXMX) would come very close to approximating TSM (VTSMX).
Forget about Russell 2000. It's redundant in your lineup.
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by 555 »

HurdyGurdy
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by HurdyGurdy »

Just for nitpicking completion,

Factsheet of the DJ completion index,
"Stated Objective
To represent all U.S. equity issues with readily available prices, excluding components of the S&P 500."

Both DJ and S&P (factsheet in http://www.standardandpoors.com/spf/doc ... US----.pdf) have their own completion indexes to complete the S&P500. Vanguard's Extended Market Index Fund tracks the S&P Completion Index.

They are not strictly the same. Paradoxically, while the DJ comp index has more companies, it seems that the S&P Completion Index reaches further into the tail of smaller companies. I wonder how can that be. Perhaps there are some "large" companies that are not in the S&P500, and the DJ sample covers them.

This should make significant difference in their behavior, of course.

Code: Select all

                           DJ Comp      S&P Comp
Number of Constituents     3,231        3,340
Market Cap "Adjusted"      4,554.1      2,597.23
Mean                           1.4           .78
Median                          .5           .25
Largest                       32.1         18.85
Smallest                       0.0          0.00 
What is the expense rate on the fund that follows the DJ Completion index and the one that follows Russell 2000?

S&P500 + Russell 2000 will leave about 500 mid cap companies missing.

Added: yes, DJ is the true complement. A Russell 2000 will overweight you on the small cap region. See graph from https://www.bogleheads.org/wiki/Stock_market_indexing:
Image

Unless the DJ is too expensive, I'll have it instead of the Russell.
Last edited by HurdyGurdy on Fri Jun 12, 2015 11:49 pm, edited 1 time in total.
Topic Author
Austex1
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Re: Russell 2000 Index + Dow Jones Completion Index?

Post by Austex1 »

Thx. Both super low ERs - .03 and .04.
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