The FTSE 100 and Dow Jones are stock market indices that track overall market performance. The FTSE 100 is made up of the largest stocks on the London Stock Exchange (LSE). The Dow Jones is made up of 30 large cap US stocks. But the FTSE 100 and Dow Jones differ in value, size, diversification and the way stocks are picked.
What’s the difference between the FTSE 100 and Dow Jones?
The FTSE 100 is a collection of the largest 100 stocks on the LSE by market capitalization, which is the current stock price multiplied by the number of stocks outstanding. The Dow Jones tracks 30 large-cap, blue chip US stocks. It’s price weighted, so stocks with higher prices have a greater impact on the index.
Popular stocks in the FTSE 100 and Dow Jones
- HSBC Holdings
- British American Tobacco
- Royal Dutch Shell A
- Rio Tinto
- Reckitt Benckiser
- Johnson & Johnson
- Procter & Gamble
- JPMorgan Chase
- Home Depot
FTSE 100 vs Dow Jones: Which is bigger?
The “bigger” index could be the one that tracks a greater number of stocks or the one that tracks stocks with a higher total market capitalization. The FTSE 100 tracks 70 more stocks than the Dow Jones.
FTSE 100 vs Dow Jones: Which is worth more?
The FTSE 100 has a market cap of just £1.996 trillion (around $3.17 trillion CAD), against Dow Jones’ market cap of $10.35 trillion USD (around $13.88 trillion CAD). The company with the largest weighting in the Dow Jones is UnitedHealth, which has a market cap of $463 billion ($621 billion CAD). The largest weighting in the FTSE 100 is Shell, with a market cap of £177 billion ($281.3 billion CAD).
FTSE 100 vs Dow Jones: Which is more diversified?
The FTSE 100 is slightly more diversified, because it tracks more stocks than the Dow Jones and is fairly evenly distributed across different sectors. That being said, it’s slightly weighted towards financial services and consumer staples stocks. Meanwhile, the Dow Jones currently leans more towards technology and financial services stocks, although this could change over time.
Platforms that let you invest in US and international stocks
These trading apps allow you to invest in companies within the indices or funds/ETFs that hold stocks in companies included in the FTSE 100 and Dow Jones.
What’s the best Dow Jones and FTSE 100 index fund?
Here are some of the best-performing Dow Jones and FTSE 100 funds according to JustETF:
|Icon||Fund||5-year performance||1-year performance (to Nov 2022)||Link to invest|
|iShares Dow Jones U.S. ETF (IYY.NYSEARCA)||12.12%||-15.05%||Buy on Interactive Brokers|
|SPDR Dow Jones Industrial Average ETF Trust (DIA.NYSEARCA)||12.51%||-4.25||Buy on Interactive Brokers|
|SPDR Dow Jones Global Real Estate UCITS ETF (SPYJ.XETRA)||1.96%||-20.55%||Buy on Interactive Brokers|
|Lyxor Dow Jones Industrial Average (LUX) UCITS ETF (C010.XETRA)||11.94%||-5.23%||Buy on Interactive Brokers|
|Icon||Fund||5 year performance||1 year performance (to July 2022)||Link to invest|
|Vanguard FTSE 100 (VUKE.LSE)||5.26%||2.70%||Buy on Interactive Brokers|
|iShares Core FTSE 100 (CUKX.LSE)||5.15%||4.24%||Buy on Interactive Brokers|
|HSBC FTSE 100 (HUKX.LSE)||5.16%||4.24%||Buy on Interactive Brokers|
|Lyxor FTSE 100 (100D.LSE)||0.00%||4.13%||Buy on Interactive Brokers|
What are the top holdings in the Dow Jones and FTSE 100?
|Dow Jones||FTSE 100|
|Johnson & Johnson||HSBC Holdings|
How to invest in the Dow Jones and FTSE 100
- Find a FTSE 100 or Dow Jones ETF or mutual fund. Some index funds track the performance of all stocks on the index, whereas others only track a certain number of stocks or are weighted towards specific stocks. You should select the fund that best suits your investment goals.
- Open a stock trading account. To invest in ETFs or mutual funds, you’ll need to open a trading account with a broker or trading platform. Keep in mind that some index funds may only be available on certain brokerages or platforms. The providers in our comparison table let you invest in Canadian and international stocks. Some of the index funds above are listed on the Toronto Stock Exchange (TSX).
- Deposit funds. You’ll need to deposit funds into your account to begin trading. You may need to pay a foreign conversion fee to convert your Canadian dollars into US dollars, so you can buy US stocks.
- Buy the index fund. Once your money has been deposited, you can buy the index fund. Most ETFs or index funds come with a small annual fee to cover fund management expenses.
The Dow Jones can give you access to some big players in the US, with the combined market capitalisation of the 30 companies listed outweighing the entire FTSE 100. Investing in the Dow Jones would give you a high proportion of technology stocks, with 20% of the index in this sector.
Meanwhile the FTSE 100 hasn’t performed quite so well, but it would give you more diversification.
More on investing
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Find out the key differences between the Dow Jones and S&P 500 plus key points to consider before investing.Read more…
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