The clear alternative to legacy US equity indexes.
Today’s US equity market looks markedly different than it did three decades ago. However, legacy US equity benchmarks look remarkably the same as they did when they were first launched. In markets disrupted by change, they have struggled to evolve and have become unnecessarily complex and costly to manage.
Global investors seeking to identify modern investment risks and opportunities in this reshaped US equity market need an alternative -- one as comprehensive, investable, transparent and modular as the legacy products, but designed expressly to remedy the flaws of the incumbent US equity indexes.
Let's take a look at how the US market has changed.
The number of listed stocks in the US market has contracted significantly from over 7,000 stocks in the late 1990s to roughly 3,500 today. Large technology companies have continued to grow as the overall number of listed companies declined.
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The weighting of the top 2 largest stocks in the FT Wilshire 5000 has risen to the highest in over 40 years
The contribution from the 'Magnificent 7' has declined since May but they have still contributed almost 2/3rd of the YTD FT Wilshire 5000 return
However, leading legacy US equity indexes continue to base size segments on a fixed number of securities that do not adjust as total market size shifts and follow an outdated and costly reconstitution process.
This distorts the view of the performance of large and small stocks -- making legacy US equity indexes significantly less representative of the market segments they were originally designed to cover. For more analysis of the "size mirage" in US equities, please see our recent research paper.
Global investors need a benchmark that reflects the evolution of the market -- a world-class index that meets all the standards required by institutional investors but constructed to address the shortcomings of the legacy products.
Reframing US Equity Market Dynamics
The FT Wilshire 5000 Index series is the broadest-based US equity market index series. Designed to reflect the modern US equity market.
The first and oldest measure of the total US equity market, and widely regarded as its best single measure
The only marquee index enhanced to reflect the modern US equity market and the needs of global investors
Provides a modern, free-float weighted, modular view of the market, allowing investors to target US market exposure more accurately and implement asset allocation strategies with precision
Employs a percentage-based approach to size segmentation, with exposures that expand and contract dynamically -- providing the right building blocks for passive and active mandates
