Dow Jones vs NYSE

If you’re looking to invest in US stocks, you might have come across both the New York Stock Exchange (NYSE) and the Dow Jones. But while experts may talk about “investing in” both of them, they’re actually slightly different beasts. We explain what they are, how they work, and how to go about investing in the Dow Jones and the NYSE.

What’s the difference between the Dow Jones and the NYSE?

• The NYSE (or New York Stock Exchange, to give it its full name) is one of the main stock exchanges in the US. Another biggie is the Nasdaq. A stock exchange is a central place where people can buy and sell shares and some other assets, such as exchange traded funds (ETFs).
• The Dow Jones is a stock market index. An index is a virtual portfolio of assets that represents a segment of the financial market, and can help investors track the performance of the group of investments within it. The Dow Jones index comprises the 30 most traded stocks on the New York Stock Exchange and the Nasdaq.

List of top 10 stocks from each

Dow Jones vs NYSE: Which is bigger?

As you would expect, given that the first is an index and the second an exchange. the NYSE holds many more listings than are included in the Dow Jones.

As the world’s largest stock exchange, in total the NYSE lists several thousand stocks, including some of the biggest and most valuable companies in the world.

The Dow Jones, on the other hand, represents just 30 stocks – albeit those that are the most frequently traded on the NYSE and Nasdaq.

Dow Jones vs NYSE: Which is worth more?

By market capitalisation of the stocks held, the NYSE is worth more. As of December 2022, it had an equity market capitalisation of nearly USD 23 trillion. While the Dow Jones boasts some of the world’s biggest companies, representing around USD 35 billion of stocks by market capitalisation, all 30 comprise only a tiny fraction of all the stocks available to deal in the US.

Dow Jones vs NYSE: Which is more diversified?

We’re probably not going to shatter any illusions here to point out that the small selection of 30 stocks comprising the Dow Jones is inevitably going to have less diversity than the thousands listed on the NYSE.

The Dow Jones is made up of “blue chip” stocks – typically big, well-established companies (think the likes of Visa and Walmart). So, while you might be able to count on fairly solid performance, you’re unlikely to get the level of diversity you could achieve if investing in a wider range of stocks – or the innovative and more exciting (if riskier) approaches you might want from some of your stock choices.

That said, even the entirety of the NYSE might not represent the full range of diversity that might be best for your portfolio, as the full exchange is known for blue chip companies. You could also consider looking at stocks listed on the Nasdaq stock exchange, for example, which is known for listing new and innovative tech companies.

Dow Jones vs NYSE chart

What’s the best FTSE index fund?

Here are some of the best performing NYSE and Dow Jones funds according to JustETF:

• Dow Jones
• NYSE

Fund	Icon	5-year performance (to Feb. ’23)	1-year performance (to Feb. ’23)	Link to invest
iShares Dow Jones industrial average (CIND)		69.52%	11.03%	Invest with eToroCapital at risk
SPDR Dow Jones Global Real Estate ETF (GBRE)		29.49%	-2.60%	Invest with IGCapital at risk
Lyxor Dow Jones Industrial Average (DJEL)		69.35%	11.04%	Invest with IGCapital at risk

Fund	Icon	5 year performance (to March ’22)	1 year performance (to March ’22)	Link to invest
Vanguard FTSE 250 (VMIG)		13.13%	-5.98%	Invest with XTBCapital at risk
iShares FTSE 250 (MIDD)		16.44%	-6.44%	Invest with eToroCapital at risk
HSBC FTSE 250 (HMCX)		15.85%	-6.67%	Invest with IGCapital at risk
Invesco FTSE 250 (S250)		17.36%	-6.14%	Invest with IGCapital at risk
Xtrackers FTSE 250 (XMCX)		17.37%	-6.22%	Invest with IGCapital at risk

What are the top holdings in the NYSE and Dow Jones?

	Dow Jones		NYSE
	Apple		VF Corporation
	Microsoft		Walmart
	Johnson & Johnson		Procter & Gamble
	UnitedHealth		JPMorgan Chase
	Visa		Exxon

How to invest in the NYSE and Dow Jones

1. Find an NYSE or Dow Jones ETF, index fund 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 more towards specific stocks. You should select the fund that best suits your investment goals.
2. Open a share-trading account. In order to invest in the funds, you’ll need to open a trading account with a broker or platform. Keep in mind that some index funds may only be available on certain brokerages or platforms. The providers in our comparison table below let you invest in US shares. We’ve listed some index funds below that are listed on the London Stock Exchange (LSE)
3. Deposit funds. You’ll need to deposit funds into your account to begin trading. Some brokers may charge you deposit fees, or you may need to pay a forex fee in order for your pounds to be converted into US dollars.
4. Buy the index fund. Once your money has been deposited, you can then buy the index fund. You’ll generally pay a small annual fee to invest in an ETF or index fund.

Bottom line

The Dow Jones and the NYSE aren’t in competition, so you don’t need to choose between them. While they’re linked, they serve different purposes.

The NYSE stock exchange lets you buy and sell stocks in leading US blue-chip companies, while the Dow Jones index is a tool to help you track the performance of a small selection of stocks on the NYSE and another major US exchange, the Nasdaq.

When branching out into US stocks, the Dow Jones might be a straightforward place to start, but it’s worth considering all your options in line with your investment strategy. If you need support, consider professional financial advice.

Frequently asked questions

• How can I invest in the Dow Jones?

  You can’t invest directly in the Dow Jones (it’s an index, not a fund). But you can invest in a fund – such an ETF (exchange traded fund) that tracks the performance of the Dow Jones. Alternatively, you can buy shares in each of the companies included in the Dow Jones. This is likely to cost you more in trading fees, though, especially as the stocks making up the Dow Jones can change periodically, meaning you’d have to sell and buy in accordance with this if you wanted to mimic the Dow Jones precisely.

• How can I invest in the NYSE?

  One way is to buy shares in companies listed on the NYSE. It would be time-consuming and expensive to buy shares in all of them though, given there are thousands. Alternatively, you can either pick and choose a few stocks, or opt for buying an ETF or index fund that tracks the performance of all or certain stocks on the NYSE.

• What is the Nasdaq?

  The Nasdaq is the second largest stock exchange in the world after the NYSE. While the NYSE is known for large, traditional, blue-chip companies, the Nasdaq is very technology heavy. As well as hosting a range of tech start-ups, it’s also home to the FAANG stocks, which comprise the world’s best-known tech firms (Apple and Facebook, for example).

• What US stock market indices are there other than the Dow Jones?

  There are lots of US stock market indices, each including a different subsection of listed US firms. Two other famous stock indices are the S&P 500 – 500 of the best stocks on US exchanges, chosen by a committee – and the Nasdaq Composite. This includes virtually all of the stocks listed on the Nasdaq.

Written by

Danny Butler

Publisher

Danny is a publisher at Finder specialising in insurance and investing. He previously worked at the global insurer Aon and has appeared in national media giving advice on insurance. Danny holds a BA in International Business from the University of Plymouth and has undying loyalty to his average-poor football team, Portsmouth FC. See full bio

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