Wilshire, a global investment technology and advisory company, in association with global media brand the Financial Times, has announced the modernisation and rebranding of the Wilshire 5000 and the launch of a new FT Wilshire 5000 Index Series. The new series provides US and global investors with complete coverage of the US investable market.
Launched in 1974, the Wilshire 5000 index is the oldest broad based US index covering the whole of the US investable market. The new FT Wilshire 5000 Index Series provides a modernised, free float weighted and modular view of the US market allowing investors to target US market exposure more accurately and implement their asset allocation strategies with precision.
The new series applies a modular approach to segmenting the US market by size allowing investors to analyse discretely the performance of mega, large, mid, small and micro-cap stocks. All segments combine to form the broadest US benchmark – now renamed the FT Wilshire 5000 Index (as of June 30, 2021) and capturing 100 percent of the total investable market. The FT Wilshire 2500 Index excludes micro-cap stocks and provides a broad-based benchmark covering 98 per cent market coverage suitable for most US institutional investors.
The definition of size segments by percentage coverage rather than number of securities ensures that size definitions remain relevant over time. As large technology companies have continued to grow and number of listed companies has decreased over the years, basing size segments on a fixed number of securities that don’t adjust as total market size shifts distorts the performance view of large and small stocks. Additionally, it creates size benchmarks that do not accurately track the holdings of funds focused on size segments.
“We’re thrilled to partner with The Financial Times on the new series,” says Mark Makepeace, Chief Executive Officer of Wilshire. “We share the same ambition, which is to provide investors with real insight into the performance of markets as well as the information and tools to make better informed investment decisions.”
This is an important milestone in our relationship with Wilshire and a significant first step in building a global index business,” says John Ridding, Chief Executive Officer of the Financial Times Group. “The US is a growth market for the FT and developing this venerable benchmark to capture rapidly-changing business and investment dynamics will serve the needs of investors and our readers there and globally”
Reza Ghassemieh, Chief Benchmarking Officer of Wilshire, comments: “Investors today want tools that are intuitive, efficient and responsive to the speed of modern markets. Using a percentage-based approach with market segment exposures that expand and contract dynamically, we provide clients with the right building blocks to gain access to a better baseline for passive and active mandates.”