The Wilshire 5000: Invest In The Entire U.S. Stock Market

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When market analysts talk about the stock market, they’re always mentioning the Nasdaq, the Dow and the S&P 500. While these three indexes are the most common stand-ins for the entire stock market, there’s another option that truly fits the bill: the Wilshire 5000.

What Is the Wilshire 5000?

The Wilshire 5000 is an index that tracks the performance of the entire U.S. stock market. Unlike other proxies for the market that may contain as few as 30 stocks, the Wilshire 5000 holds thousands at any given time to try to truly replicate the whole market.

That means it’s an enormous index. In fact, its total market value was $46 trillion as of late September 2021. That’s almost $8 trillion more than the S&P 500, which tracks about a 10th of the companies.

Wilshire maintains three different versions of the index, each of which is weighted slightly differently:

  • Full market capitalization: With the full market capitalization model, companies are weighted based on their market cap, or the total value of their outstanding shares.
  • Float-adjusted market capitalization: Float-adjusted market capitalization uses companies’ market cap but only counts the shares available for purchase on the open market.
  • Equal weight: With an equal weight index, the index invests an equal amount into each security. Each company has the same level of importance and impact on the index’s performance, no matter their size.

Wilshire 5000 Companies

Despite its name, the Wilshire 5000 does not track 5,000 equities. The actual count of securities that it tracks changes over time. Since the Wilshire 5000 Index’s inception, index membership has fluctuated. For example, there were over 7,500 companies in the index as of 1998. Today, that number has dropped to about 3,500. The composition of the index is reviewed and adjusted monthly.

To be included in the Wilshire 5000, companies must be publicly traded and have their headquarters in the United States. As the index aims to replicate the economy on the whole, companies included in the index can range in size and market capitalization and be from any industry.

For example, Apple, the biggest company within the index, has a market capitalization of $2.117 trillion. By contrast, Westell Technologies—one of the smallest companies within the index—has a market capitalization of just $8 million.

As of Sept. 27, 2021, the largest companies in the Wilshire 5000 Index (by percentage of their net assets occupy of the index’s total) are:

You can view the full list of the members of the Wilshire 5000 on the Wilshire website.

Wilshire 5000 vs Other Market Indices

While the Wilshire 5000 is the most comprehensive of the market indices, there are several other indexes to consider when evaluating the market:

S&P 500

Unlike the Wilshire 5000, the S&P 500 is relatively narrow in scope. It tracks the share prices of 500 of the largest public companies in the United States. To be included in the S&P 500, companies must have outstanding shares worth over $10 billion.

Nasdaq 100

The Nasdaq 100 measures just 100 companies traded on the Nasdaq exchange. Unlike the Wilshire 5000, it includes both domestic and international companies, but it doesn’t include financial organizations.

Dow Jones Industrial Average (DJIA)

The Dow Jones Industrial Average (DJIA) is the most narrow of the indices, tracking just 30 stocks. It measures the performance of blue-chip stocks, meaning large companies that historically have performed well and demonstrated growth.

Russell 3000

The Russell 3000 measures the performance of 3,000 of the largest U.S. stocks and gives exposure to the total stock market. It is the most similar to the Wilshire 5000 of the indexes listed.

Wilshire 5000 Returns vs Major Market Indexes

How to Invest in the Wilshire 5000

While you can invest in individual stocks in the index, diversifying your portfolio according to the Wilshire 5000 can be overwhelming—and expensive. You’d have to buy shares of thousands of equities, and managing and rebalancing your portfolio on your own would be immensely difficult.

Another option is to invest in index funds, one-stop-shop investment vehicles that aim to mimic the performance of a particular index. That said, Wilshire 5000 index funds are less common than funds that track other indexes, in part because of the massive scale of the index and lower liquidity of smaller companies in the index, according to etf.com. You also may experience slightly more volatility with a Wilshire 5000 fund, given the amount of mid- and small-cap stocks it has.

Funds that track the index, parts of it or similar total-market indexes include:

  • Schwab Total Stock Market Index (SWTSX)
  • Wilshire 5000 Index Fund (WINDX)
  • Wilshire 5000 Index Portfolio Investment Class Shares (WFIVX)
  • Vanguard Total Stock Market ETF (VTI)

Should You Invest in the Wilshire 5000?

If you’re looking to invest in all of the stock market, it might be hard to find a more comprehensive all-in-one investment than a Wilshire 5000 index fund. But keep a few things in mind:

Watch out for expense ratios. While index funds charge lower fees overall, less common indexes, like the Wilshire 5000, tend to have higher costs than you might find with an S&P 500 fund. And their size doesn’t guarantee superior returns that might justify those higher fees.

You may not get as much exposure to small- and mid-cap companies as you want. Even with a fund that tracks the whole stock market, your investment will still likely skew very heavily toward large companies. Remember: The S&P 500 has about 80% of the market capitalization of the Wilshire 5000. This means those companies will represent the vast majority of the latter in a market-capitalization-weighted index fund. If you want exposure to small and mid caps, you may be better served by index funds expressly tailored to those.

If you’re not sure what investments are best for you, consider consulting with a financial advisor to discuss your needs and develop a personalized investment plan.

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