The FTSE 100 and Dow Jones are both stock market indices that are designed to track the performance of markets. In the case of the FTSE 100, it comprises the largest stocks on the London Stock Exchange, while the Dow Jones is made up of 30 large cap stocks in the US. These indices are different in the way the stocks are picked, their value, size and diversification.
The FTSE 100 is a collection of the largest 100 stocks on the London Stock Exchange when you order the companies by market capitalisation, which is the value of all the company’s shares added together. The Dow Jones is slightly different – it’s a price weighted index of 30 companies listed on US exchanges. “Price weighted” simply means that companies on the index with a higher share price have a proportionate impact on the Dow Jones.
There are a few different interpretations of “bigger” – it could be the one with the higher number of stocks regardless of value or it could be by market capitalisation, which is the value of the stocks. When referring to the number of stocks that the index holds, the FTSE 100 is bigger, holding an additional 70 companies.
The FTSE 100 has a market cap of just £1.996 trillion, against Dow Jones’ market cap of $10.35 trillion (about £8.25 trillion). The company with the largest weighting in the Dow Jones is UnitedHealth, which has a market cap of $463 billion (£369 billion). The largest weighting in the FTSE 100 is Shell, with a market cap of £177 billion.
The FTSE 100 has slightly more diversification because it has more stocks in it than the Dow Jones and has a fairly even distribution of stocks across different sectors, with a slight weighting towards financial services and consumer staples companies. Meanwhile, the Dow Jones is a little heavy towards technology and financial services.
If you’re looking for diversification, there’s no reason why you couldn’t invest in both – this way you get additional global diversification with both UK and US shares.
These trading apps allow you to invest in companies within the indexes directly or to invest in funds/ETFs.
Here are some of the best-performing Dow Jones and FTSE 100 funds according to JustETF:
| Icon | Fund | 5-year performance (to February 2024) | 1-year performance (to February 2024) | Link to invest |
|---|---|---|---|---|
 | Lyxor Dow Jones Industrial Average (DJEL) | 68.82% | 10.45% | Capital at risk |
 | iShares Dow Jones industrial average (CIND) | 68.67% | 10.07% | Invest with eToroCapital at risk |
| Fund | Icon | 5-year performance (to July 2024) | 1-year performance (to July 2024) | Link to invest |
|---|---|---|---|---|
| iShares Core FTSE 100 (CUKX) | | 28.82% | 12.49% | Invest with eToroCapital at risk |
| Xtrackers FTSE 100 (XDUK) |  | 28.66% | 12.42% | Invest with HLCapital at risk |
| Invesco FTSE 100 (S100) |  | 28.41% | 12.19% | Invest with HLCapital at risk |
| HSBC FTSE 100 (HUKX) |  | 7.30% | 8.35% | Invest with XTBCapital at risk |
| Vanguard FTSE 100 (VUKE) |  | 6.27% | 7.89% | Invest with XTBCapital at risk |
| iShares Core FTSE 100 (Dist)(ISF) | | 6.21% | 7.94% | Invest with XTBCapital at risk |
| Amundi FTSE 100 (100D) |  | 6.14% | 8.81% | Invest with HLCapital at risk |
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
The Dow Jones has historically performed better than the FTSE 100, although this doesn’t guarantee that it always will. As it’s only got 30 stocks, the Dow Jones wouldn’t create as much diversification as you might be looking for in an investment, while the FTSE 100 has plenty of diversification available.
There’s also no reason why you couldn’t invest in both, which would give you a diverse set of stocks, including some stocks from across the globe.
| Dow Jones | FTSE 100 | ||||
|---|---|---|---|---|---|
 | Apple |  | AstraZeneca | ||
 | Microsoft |  | Unilever | ||
 | Johnson & Johnson | | HSBC Holdings | ||
 | UnitedHealth |  | Diageo | ||
 | Visa |  | GlaxoSmithKline |
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These trading apps allow you to invest in companies within the indexes directly or to invest in funds/ETFs.
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.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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