SANTA MONICA, Calif., April 6, 2001 (PRIMEZONE) -- The Wilshire 5000 Total Market Index (TMW), the broadest indicator of the market's overall performance, ended the first quarter of 2001 at 10,645.85, down 12.6 percent from its 2000 year-end figure of 12,175.88, according to Wilshire Associates, a leader in providing investment management, investment consulting and investment analytics services.
Based on those figures, investors lost $1.8 trillion in wealth during the quarter. On March 30, 2001, the Wilshire 5000 was down 3,650 or 25.5 percent from the end of the first quarter of 2000, reflecting a wealth loss to investors of $4.2 trillion. If the Index falls below 10,000, it will reach its lowest level since October 29, 1998, when it closed at 9,906.87.
The Wilshire 5000 Total Market Index is the only index that provides the magnitude in dollars of what is lost or gained in the U.S. equity markets. Every one-point change in the Wilshire 5000 represents approximately $1.15 billion. It measures the performance of all U.S.-headquartered equity securities with readily available price data. Nearly 7,000 capitalization-weighted security returns are used to adjust the index. It is the only such broad-based indicator of the value of U.S. equities.
The Wilshire 5000, which is cited frequently by Federal Reserve Chairman Alan Greenspan as the index he uses to measure the equity market, was developed 25 years ago by Dennis Tito, the founder and chairman of Wilshire and a former scientist with the Jet Propulsion Laboratory.
"Small cap value stocks may profit the most if Fed Chairman Alan Greenspan continues to ease monetary policy and allow the economy to mend," said Tom Stevens, Senior Vice President, Wilshire Associates, Inc. "Although large cap value did quite well in 2000, for example the Wilshire Target Large Company Value Portfolio was up 16.9 percent, small cap value stocks traditionally have not behaved like large cap value stocks, which historically performed best in a recovery stage where the expansion is modest to robust," he added.
"The market is beginning to recognize that those companies with strong fundamentals ignored during the technology boom of the late 1990s -- such as small cap value and large cap value -- should continue to benefit," Stevens stated. "It appears Greenspan eased monetary policy in order to avert a recession and increase spending and borrowing power. Given that the large growth and Nasdaq downward spiral does not look as if it is over, small cap value portfolios could continue to outperform the market."
Stevens suggested that investors and financial advisors should keep in mind that exposure to small cap value stocks adds diversification to portfolios. "With 2000 now behind us and valuations still high within the large growth arena -- especially with some earnings disappointments -- we believe the Wilshire Target Small Company Value Portfolio (DTSVX and WSMVX) and Wilshire Target Large Company Value Portfolio (DTLVX and WLCVX) should be definite allocations for 2001."
The Wilshire 5000 Total Market Index is available real-time via major market data vendors, including S&P Comstock, Bloomberg, Reuters and Bridge. The index is updated in 15-second intervals. Real-time figures also are available free of charge at the Wilshire Website at www.wilshire.com.
Wilshire Associates is a leader in providing investment management, investment consulting and investment technology services to a wide variety of institutional and high net worth investors worldwide. Wilshire has provided asset management, consulting and portfolio analytics to more than 400 institutional clients with assets of $1 trillion, including 20 of the largest Fortune 500 corporations. It has provided private equity services since 1984 and has advised clients in committing approximately $1.5 billion to private investments in the past ten years.
Past performance is no guarantee of future results. The Wilshire 5000 Total Market Index, Dow Jones Industrial Average and S&P 500 Index are unmanaged and are not available for direct investment. For more information about the Wilshire 5000 Index Portfolio, including fees and expenses, please obtain a prospectus by calling 1-800-200-6796. Please read it carefully before you invest or send money.