The Takeaway
Designed for Practical Implementation: Built to reflect how professional managers actually invest, the Morningstar Market Indexes combine academic rigor with the demands of managing capital at scale, bridging the gap between theory and practice.
Defining the Total Market: The parent index for this series, the Morningstar US Total Market Index, is designed to represent 100% of the investable US equity market and provides the foundation for more targeted size, style, and sector indexes.
Flexible Size Segmentation Framework: The indexes expand and contract with the market, using market cap percentages rather than fixed constituent counts. This produces more meaningful comparison across time, even as the composition and concentration of the market evolves.
Managing Turnover and Reducing Market Impact: Transitional reconstitution paired with a combination of banding and packeting help ensure the indexes reflect meaningful shifts in economic reality while reducing trading costs and market impact.
The purpose of an index is not simply to represent the market. It is to provide a realistic foundation for investment decisions, portfolio construction, and performance evaluation. Achieving that objective requires balancing accurate market representation with practical investability.
The Morningstar Market Indexes are designed to provide a comprehensive and accurate view of the entire universe of investable US equities across size, style, and sector segments. The methodology is built to reflect how professional managers actually invest while supporting investability at scale through design choices that help reduce unnecessary turnover and transaction costs.
The construction process begins by identifying the eligible universe of US equities. Securities are screened by listing exchange, company type, share type, and domicile. These filters focus the index on US-domiciled common stocks and REITs—the opportunity set most relevant to US equity investors.
Securities from the eligible universe are then evaluated against investability and liquidity criteria. This step is essential because the index is intended to represent securities that investors can reasonably buy and sell. Excluding securities that fail these screens helps the index more accurately and cost-effectively reflect the performance of the investable US equity market.
©2026 Morningstar. All Rights Reserved. The information, data, analyses and opinions contained herein (1) include the proprietary information of Morningstar, (2) may not be copied or redistributed, (3) do not constitute investment advice offered by Morningstar, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar has not given its consent to be deemed an "expert" under the federal Securities Act of 1933. Except as otherwise required by law, Morningstar is not responsible for any trading decisions, damages or other losses resulting from, or related to, this information, data, analyses or opinions or their use. References to specific securities or other investment options should not be considered an offer (as defined by the Securities and Exchange Act) to purchase or sell that specific investment. Past performance does not guarantee future results. Before making any investment decision, consider if the investment is suitable for you by referencing your own financial position, investment objectives, and risk profile. Always consult with your financial advisor before investing.
Indexes are unmanaged and not available for direct investment.
Morningstar indexes are created and maintained by Morningstar, Inc. Morningstar® is a registered trademark of Morningstar, Inc.