How many companies are listed on global stock markets?

El_Torro

I know what you're thinking: "Oh look, somebody's asking a question where they could easily Google the answer." Don't worry though, I did Google it!

While I (and I'm sure many people on this forum) spend a lot of time thinking about the stock markets and investing in them I've never really considered how many companies there are out there. Well, wonder no longer, the answer is 58,000, give or take. I don't know if the size distribution follows the Pareto distribution (this would mean that the top 20% of companies make up 80% of the size of global stock markets). I tried Googling that too but didn't find a quick answer and ran out of patience. 

One stat I was able to find is that there are about 2,223 companies on the New York Stock Exchange. Looking at the S&P500 specifically, which funnily enough is made up of 500 companies, they account for 80% of the US capitalization. So the 80/20 rule more or less stacks up, at least in the US.

To put it into a bit of context let's look at 2 of the more popular global trackers and how many companies they invest in: 

HSBC FTSE All World Index - 3,698 companies
Vanguard FTSE All World - 3,624 companies

So global trackers invest in less than 7% of all the companies out there. Is this a problem? Dunno, I'll let you decide that for yourself. What I will say though is that with any sample size as big as 58,000 there will be a massive tail. Lots of smaller companies that probably wouldn't make much difference to an index if they were included. I imagine there's a lot of churn at the lower end of the scale too, with companies dropping off the list (either because they have gone bust, or for other reasons). 

So yeah, just some food for thought on a Monday night. Maybe you learnt something, maybe you didn't. The important thing is that I went down a rabbit hole this evening and managed to write some of my findings down. Just remember that when you think you are invested in the whole of the market chances are you're really not. Not that I'm saying that's an issue. 

aroominyork

Is anyone not surprised that of the 58,000 only 2,223 are on Wall Street, but over 30,000 are in Asia Pacific?

Labtebricolist

The Vanguard FTSE global all cap fund has over 7,000 stocks.  There are probably others with more, as the MSCI ACWI has over 8k in the index.  After a certain point, however, the costs of replication outweigh the benefits of additional diversification for very marginal markets and small cap stocks.

El_Torro

aroominyork said:

Is anyone not surprised that of the 58,000 only 2,223 are on Wall Street, but over 30,000 are in Asia Pacific?

Great, more stats

Asia Pacific is home to about 4.3 billion people, more than 50% of the total. So perhaps not too big a surprise that it is also home to most of the world's traded companies. Although I imagine that a larger proportion of the region's workforce work for companies that are not publicly traded than is the case in the US. 

dunstonh

FTSE All World benchmark is large cap and mid cap.   It doesnt do small cap.

Its worth looking at how benchmarks are created and which countries get filtered out.  This is published on the websites of the various benchmark creators.

GeoffTF

The FTSE All World index contains only large and medium capitalisation stocks. The cut of point is almost exactly the cut off point for the FTSE 100. The larger companies in the FTSE 250 are small cap stocks globally. The remaining stocks are micro caps.

Vanguard FTSE Global All Cap Index Fund has 7,114 stocks. Clearly, it adds only small caps. I compared the performance of VWRL with that of Vanguard FTSE Global All Cap Index Fund on Morningstar. There was very little difference for the first 7 years, but VWRL has pulled 2.7% ahead in the last year. It could have gone the other way though. I am not going to lose any sleep over not having any small or micro caps.

EthicsGradient

The MSCI ACWI IMI Index (mentioned earlier) with about 8,400 constituents claims to cover "approximately 99% of the global equity investment opportunity set", which implies the other 50,000 or so are worth very little, and we're not looking at a Pareto distribution at all. Though I believe there is a fair amount of disagreement on what it truly "investable" in China, which may complicate the stats.

Martico

I did learn something, @El_Torro - thanks!

Hoenir

Europe has over 4,500 listed small companies the majority of which aren't covered by a single financial analyst. There's opportunities a plenty if you enjoy turning over stones in rock pools. 

Hoenir

aroominyork said:

Is anyone not surprised that of the 58,000 only 2,223 are on Wall Street, but over 30,000 are in Asia Pacific?

Had to wonder about this. As there's an index the Russell 3000. 

The Russell 3000 Index provides exposure to the U.S. stock market. Its date of inception was Jan. 1, 1984. The index measures the performance of the largest 3,000 U.S. companies (give or take) representing approximately 96% of the investable U.S. equity market.

Comparable to the FTSE All Share that excludes AIM listed companies

aroominyork

Hoenir said:

aroominyork said:

Is anyone not surprised that of the 58,000 only 2,223 are on Wall Street, but over 30,000 are in Asia Pacific?

Had to wonder about this. As there's an index the Russell 3000. 

The Russell 3000 Index provides exposure to the U.S. stock market. Its date of inception was Jan. 1, 1984. The index measures the performance of the largest 3,000 U.S. companies (give or take) representing approximately 96% of the investable U.S. equity market.

Comparable to the FTSE All Share that excludes AIM listed companies

Good point. Maybe it’s because NASDAQ is not part of the NYSE... it's a separate exchange, so we're guilty of conflating indexes and countries.

So, respected OP, you should not say "...there are about 2,223 companies on the New York Stock Exchange. Looking at the S&P500 specifically, which funnily enough is made up of 500 companies, they account for 80% of the US capitalization. So the 80/20 rule more or less stacks up, at least in the US", because the S&P includes NASDAQ stocks as well as NYSE stocks. The internet tells me: "If a stock symbol has three letters or fewer it is most likely a member of the New York Stock Exchange. If a stock has four letters or more it is most likely a member of the NASDAQ." So, for example, Tesla/TSLA is NASDAQ and in the S&P.