Wilshire 4500 Completion Index
What Is the Wilshire 4500?
The Wilshire 4500 Completion Index is a market-capitalization-weighted index that tracks essentially all publicly traded U.S. stocks, excluding those included in the S&P 500.
The Wilshire 4500 Completion Index is a broad market index designed to represent the performance of the U.S. equity market beyond the mega-cap giants. Often referred to simply as the "Wilshire 4500," its full name is the Wilshire 4500 Completion Index because it "completes" the picture of the U.S. market when paired with the S&P 500. Essentially, if you take the Wilshire 5000 (which tracks the entire U.S. investable market) and subtract the S&P 500, you get the Wilshire 4500. This means the index is composed primarily of small-cap and mid-cap companies. It excludes the Apples, Microsofts, and Amazons of the world to focus on the thousands of smaller, often faster-growing companies that make up the rest of the economy. The index is market-capitalization-weighted, meaning larger companies within the index (the mid-caps) have a greater influence on its performance than the smallest micro-caps. It serves as a vital benchmark for investors looking to gauge the health of the broader American economy outside of the blue-chip sector. It is the definitive measuring stick for the "rest of the market."
Key Takeaways
- The Wilshire 4500 tracks the "extended market" of U.S. stocks.
- It consists of practically all U.S. equities minus the 500 large-cap companies in the S&P 500.
- It is a key benchmark for small-cap and mid-cap stocks.
- When combined with the S&P 500, it creates the total U.S. stock market (similar to the Wilshire 5000).
- Despite the name "4500," the number of stocks in the index fluctuates and is not exactly 4,500.
Composition and Characteristics
The "4500" in the name is historical and does not reflect the exact number of stocks currently in the index. Due to mergers, bankruptcies, delistings, and IPOs, the actual count fluctuates constantly and is often around 3,500 to 4,000 stocks. The index includes companies from all sectors, provided they are headquartered in the U.S. and trade on major exchanges like the NYSE or Nasdaq. Because it excludes the S&P 500, the Wilshire 4500 is significantly more volatile than the large-cap indices. Small and mid-sized companies generally carry higher risk but also offer higher potential growth (beta). During economic expansions, the Wilshire 4500 often outperforms the S&P 500 as smaller companies grow rapidly and are acquired. Conversely, during recessions, it tends to underperform as investors flock to the safety and liquidity of established blue-chip stocks. The sector weighting also differs; it tends to be heavier in technology, healthcare (biotech), and industrials compared to the S&P 500.
Who Uses the Wilshire 4500?
Institutional investors and fund managers use the Wilshire 4500 as a benchmark for their small-cap and mid-cap funds. It allows them to compare their performance against a broad "extended market" standard rather than a narrow slice like the Russell 2000. For individual investors, the index is most commonly encountered through "extended market" index funds or ETFs. An investor who holds an S&P 500 fund and wants total market exposure might add a Wilshire 4500 fund to their portfolio. This combination (S&P 500 + Wilshire 4500) effectively replicates the entire U.S. stock market. This strategy is often used in 401(k) plans where a "Total Stock Market" fund is not available, but separate S&P 500 and Extended Market funds are.
Real-World Example: Building a Total Market Portfolio
An investor wants to own the entire U.S. stock market but their 401(k) only offers separate funds.
Wilshire 4500 vs. Russell 2000
Comparing the two major benchmarks for non-large-cap stocks.
| Feature | Wilshire 4500 | Russell 2000 |
|---|---|---|
| Universe | All U.S. stocks ex-S&P 500 | Smallest 2000 stocks in Russell 3000 |
| Coverage | Mid-cap, Small-cap, Micro-cap | Small-cap primarily |
| Company Count | ~3,500 (variable) | ~2,000 (fixed annually) |
| Use Case | Total market completion | Pure small-cap exposure |
FAQs
No. By definition, the Wilshire 4500 excludes all companies in the S&P 500. It is designed to be a complement to the S&P 500, not a replacement. If a company in the Wilshire 4500 grows large enough to be added to the S&P 500, it is removed from the Wilshire 4500.
You cannot invest directly in an index, but you can invest in ETFs or mutual funds that track it. Examples include the Vanguard Extended Market Index Fund (VXF), which tracks a similar benchmark often correlated closely with the Wilshire 4500. These funds offer broad exposure to the mid and small-cap market.
Because when you add it to the S&P 500, you "complete" the U.S. market. S&P 500 + Wilshire 4500 = Wilshire 5000 (Total Market). It allows investors to fill the gap left by holding only large-cap stocks.
It is not "better," just different. It offers higher potential returns (beta) but comes with higher risk (volatility). Over long periods, small and mid-caps have historically outperformed large caps (the "size premium"), but they can lag significantly for years at a time.
The sector weighting differs from the S&P 500. It tends to have higher exposure to Technology, Healthcare (biotech), and Industrials, and less exposure to stable sectors like Consumer Staples and Utilities compared to the large-cap index. This contributes to its higher volatility.
The Bottom Line
The Wilshire 4500 Completion Index is the definitive benchmark for the "rest" of the U.S. stock market. For investors seeking exposure beyond the well-known mega-caps, it provides a diversified basket of mid-sized and small companies that drive innovation and growth. While riskier than the S&P 500, it is an essential component for any investor looking to build a truly diversified, total-market portfolio. By combining these two indices, an investor owns a piece of nearly every public company in America.
Related Terms
More in Stock Market Indices
At a Glance
Key Takeaways
- The Wilshire 4500 tracks the "extended market" of U.S. stocks.
- It consists of practically all U.S. equities minus the 500 large-cap companies in the S&P 500.
- It is a key benchmark for small-cap and mid-cap stocks.
- When combined with the S&P 500, it creates the total U.S. stock market (similar to the Wilshire 5000).