Wilshire Plans Index Fund for Small Investors
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Wilshire Associates, best-known for its Wilshire 5,000 index that tracks virtually the entire U.S. stock market, is betting that more small investors are ready to take portfolio indexing beyond the Standard & Poor’s 500.
The Santa Monica-based firm said Wednesday it is launching a Wilshire 5,000 Index mutual fund on Monday. It’s the first time Wilshire is marketing to individuals a fund that tracks the 7,200-stock index. It has sold the fund to institutions since 1983.
“If there is any time to invest in an index fund that provides broad market exposure--exposure beyond simply large-cap stocks--now is it,” said Tom Stevens, co-portfolio manager.
The fund, with a minimum initial investment of $1,000, will own as many as 2,000 of the stocks in the index, selected by market capitalization and “statistical sampling,” said Wilshire’s Jennifer Openshaw.
The blue-chip S&P; 500, which represents nearly 75% of the market value in the Wilshire 5,000, has gotten better results in each of the last three years. But small stocks, out of favor for five years, are as attractive now as they were in 1979 and 1990, Wilshire said. If history repeats, small stocks should beat blue chips over the next three years, it said--benefiting the Wilshire 5,000 at the S&P; index’s expense.
Wilshire will compete with fund giant Vanguard Group, which has been selling its own Wilshire 5,000 fund since 1992.
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