Ever feel like your S&P 500 index fund is missing a little something? You're not alone. Most people think owning an S&P 500 fund means they own "the market," but they’re actually skipping over thousands of companies. This is where a completion total stock market index comes into play. It’s basically the "missing piece" of the puzzle.
Imagine you’re building a Lego set but the box only came with the biggest bricks. You can build the main structure, sure, but you can't finish the details. That’s the S&P 500. It’s got the giants—Apple, Nvidia, Microsoft—but it leaves out the scrappy mid-caps and the tiny small-caps that could be the giants of tomorrow. A completion index is designed to track everything except those top 500 companies.
The Boring (but Critical) Definition
Essentially, a completion index—often officially called something like the S&P Completion Index or the Dow Jones U.S. Completion Total Stock Market Index—is a basket of every publicly traded U.S. company that isn't in the S&P 500.
Think about that for a second. The S&P 500 represents about 80% of the U.S. stock market's value. That sounds like a lot. But that remaining 20% is where the wild stuff happens. We’re talking about roughly 3,000 to 3,500 companies.
When you combine an S&P 500 fund with a completion total stock market index fund, you’ve basically created your own Total Stock Market fund. It’s like a DIY version of Vanguard’s famous VTI or the Schwab Broad Market ETF.
Why Bother With This "Completion" Stuff?
Why wouldn't you just buy a Total Stock Market fund and call it a day?
Usually, it’s because of your 401(k). Most employer-sponsored plans are kinda limited. They almost always offer an S&P 500 index fund because it’s the "gold standard." But they frequently lack a true total market option. Instead, they might give you a bunch of individual small-cap or mid-cap funds that are hard to balance.
If your 401(k) offers a completion index fund (like the Vanguard Extended Market Index), you can pair it with your S&P 500 fund to get full coverage without the headache of picking winners in the small-cap world. Honestly, it's just cleaner.
The Tesla Lesson: Why "Completion" Matters
Let's talk about a real-world example that still haunts some investors.
Before Tesla was added to the S&P 500 in December 2020, it was a massive part of the completion index. Because the S&P 500 has strict rules about profitability and committee approval, Tesla sat in the "completion" or "extended market" universe for years while its stock price went absolutely parabolic.
If you only owned an S&P 500 fund back then, you missed out on a 2,800% return.
By the time Tesla finally "graduated" to the S&P 500, a huge chunk of its legendary growth had already happened. Investors who held a completion total stock market index fund caught all of that. They owned Tesla when it was a mid-cap "teenager" growing into a giant.
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How the Math Actually Works
If you're trying to mirror the entire U.S. market using these two pieces, you can't just go 50/50. That would be way too heavy on small companies.
Since the S&P 500 is roughly 80% of the market value, the "recipe" for a total market return is usually:
- 80% S&P 500 Index Fund
- 20% Completion Index Fund
Some people prefer 82/18 or 75/25 depending on how much "spice" they want from the smaller names. But 80/20 is the basic math.
As of early 2026, the Vanguard Extended Market ETF (VXF), which tracks the S&P Completion Index, holds over 3,400 stocks with a median market cap of around $8.2 billion. Compare that to the S&P 500, where the median market cap is over $30 billion. You’re playing in a different league here.
Is It Riskier?
Sorta. But not in the way you might think.
Small-cap and mid-cap stocks are definitely more volatile. They swing harder when the economy gets shaky. If the Fed hints at interest rate changes, these smaller companies—who often rely more on debt than the cash-rich Big Tech titans—tend to jump or dive more violently.
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However, by adding a completion index to your S&P 500 holdings, you're actually diversifying. You're spreading your eggs into 3,000 more baskets. While the ride might be a bit bumpier, you’re protected from the risk of the "Magnificent 7" (or whatever they’re calling the top tech stocks this year) suddenly losing their luster.
Real Names in the Completion Universe
You might think the completion index is just a bunch of companies you’ve never heard of. It’s not.
Depending on the month and who has been promoted to the S&P 500 lately, the completion index usually includes companies like:
- Workday
- Snowflake
- Reddit (which joined the public markets not too long ago)
- DraftKings
- Cloudflare
These are massive, multi-billion dollar brands. They just aren't in the "top 500" club yet.
Common Mistakes Investors Make
People often confuse a completion index with a "Small Cap" fund like the Russell 2000. They aren't the same thing.
The Russell 2000 only looks at the bottom 2,000 of the top 3,000 stocks. It specifically ignores the mid-caps. If you pair an S&P 500 fund with a Russell 2000 fund, you’ll actually have a "hole" in your portfolio where the mid-cap stocks should be.
A completion index is better because it bridges that gap. It grabs everything from the 501st largest company all the way down to the micro-caps. No gaps. No overlaps. Just a smooth connection.
What You Should Do Next
If you're looking at your portfolio and realizing you’re 100% in the S&P 500, don't panic. You’re still doing better than most people. But if you want that true "total market" exposure, here is the move:
Check your brokerage or 401(k) for funds with "Completion" or "Extended Market" in the name. At Vanguard, it’s VEXAX (mutual fund) or VXF (ETF). At Fidelity, it’s often the Fidelity Extended Market Index Fund (FSMAX).
Once you find it, look at the expense ratio. These funds should be dirt cheap—usually under 0.06%. If the fee is high, it might not be worth it. But if it’s low, shifting about 20% of your U.S. stock allocation into a completion total stock market index is one of the smartest ways to ensure you don't miss out on the next Tesla.
Actionable Next Steps:
- Audit your 401(k) list: Look for the words "Extended Market" or "Completion."
- Check your overlap: Use a tool like Morningstar’s Instant X-Ray to see if your current mid-cap or small-cap funds are redundant.
- Rebalance slowly: You don't have to sell everything today. Just direct your new contributions toward the completion fund until you hit that 80/20 split.