What Is the FT Wilshire 5000 Index (FTW5000)?

What Is the FT Wilshire 5000 Index (FTW5000)?

Let me explain the FT Wilshire 5000 Index (FTW5000) directly to you: it's a broad-based, market capitalization-weighted index that aims to capture 100% of the United States investible market. This index was previously called the Wilshire 5000 Total Market Index (TMWX) until it got rebranded on June 30, 2021, as part of Wilshire's partnership with The Financial Times.

Key Takeaways

You should know that the FT Wilshire 5000 Index (FTW5000) seeks to cover 100% of the investible US market. Before June 30, 2021, it traded under the name Wilshire 5000 Total Market Index (TMWX). At its peak, it included over 7,500 stocks, but as of now, it holds just 3,687.

Understanding the FT Wilshire 5000 Index (FTW5000)

The index got its name from the nearly 5,000 stocks it had at launch, and it grew to over 7,500 by 1998. Since then, the number has dropped to 3,687 as of December 31, 2021. It includes all US equities with readily available prices, excluding thinly-traded and bulletin-board issues.

Like other market cap-weighted indexes, this one overweights companies with higher firm values and underweights those with lower ones. As of December 31, 2021, it was weighted 28% toward information technology, 13% to health care, and 13% to consumer discretionary sectors.

Special Considerations

Through its partnership with The Financial Times, Wilshire launched six other indexes in the FT Wilshire 5000 Series. These include the FT Wilshire 2500 Index (FTW2500), FT Wilshire US Mega Cap Index (FTWUSG), FT Wilshire US Large Cap Index (FTWUSL), FT Wilshire US Mid Cap Index (FTWUSD), FT Wilshire US Small Cap Index (FTWUSS), and FT Wilshire US Micro Cap Index (FTWUSO).

This index is intended as the broadest market index available. It reflects the movement of the entire market, covering far more than indexes like the S&P 500 or Dow Jones Industrial Average, even if it doesn't include every single publicly-traded company.

History of the FT Wilshire 5000 Index (FTW5000)

Wilshire Associates established the index in 1974, and it was renamed 'Dow Jones Wilshire 5000' in April 2004 when Dow Jones & Company took over management. On March 31, 2009, it returned to Wilshire Associates after the partnership ended.

It started with a value of 1404.60 points on December 31, 1980, equating to a total market cap of $1,404.596 billion. Back then, each point equaled $1 billion, but adjustments for corporate actions and changes have altered that over time.

The index grew more than tenfold in under 20 years, hitting a record high of 14,751.64 points on March 24, 2000. It didn't surpass that until February 20, 2007. On April 20, 2007, it closed above 15,000 for the first time, outperforming the S&P 500 due to strong small-cap performance.

It reached an all-time high of 15,806.69 on October 9, 2007, just before the Great Recession. Then it dropped below 10,000 on October 8, 2007, for the first time since 2003, bottoming out at 6,858.43 on March 9, 2009, with a loss of about $10.9 trillion in market cap.

The index first went over 20,000 intraday on February 28, 2014, closing above it on March 4. It hit 21,000 on July 1, 2014, and as of February 1, 2022, it was trading near an all-time high above 45,000.

Other Broad Market Indexes

While the Wilshire 5000 is often cited as the top broad-based index, others exist like the CRSP US Total Market Index, which also aims for a full picture of US equities with nearly 4,000 holdings across all cap sizes.

The Dow Jones U.S. Total Market Index (DWCF) is another market cap-weighted index providing broad coverage of the US stock market, including eligible common equities.

Then there's the Russell 3000 Index, maintained by FTSE Russell, which tracks the 3,000 largest US-traded stocks, representing about 98% of all US incorporated equity securities.