Wilshire Associates, the Santa Monica, Cal. money manager, hoping to catch the wave of popularity index funds are now enjoying among individual investors, has introduced its first pure index fund.

Wilshire is trying to gain momentum on the retail level, and it is promoting the Wilshire 5000 Index Portfolio not only as a way to invest in a broad index but also as a way to get in on a possible run on small-cap stocks.

With large-cap stocks in favor, the Wilshire 5000, an index of the entire market that includes all U.S. stocks and invests not only in large-cap but also small- and medium-cap stocks, is not enjoying the same gains as the S&P 500.

But, small-caps may be in for a comeback, Wilshire officials say. Small-cap stock valuations are the lowest they have been since 1979 and 1990, Wilshire says. At both of those times, small-caps out-performed large caps for the subsequent three years straight. It may be small caps' turn for a resurgence and the S&P 500, loaded with large-caps, could lose momentum if large caps move in the opposite direction as small-caps, Wilshire officials say.

"Large-cap stocks have had an unusually long run-up," said Jennifer Openshaw, director of investor services at Wilshire.

Wilshire offers its no-load funds through a variety of discount brokerages including Charles Schwab, Jack White and Fidelity. However, the company has no advertising plans for the new product.

"We tend to work primarily through financial planners, so we're telling them (about the new fund) directly right now," Openshaw said. The company has used $3 million of its own money as seed capital for the fund.

Wilshire is most widely known for its work with institutions and separate accounts, but it also runs four other equity funds that use the Wilshire 5000 in what is called "style indexing." Wilshire takes the best-performing stocks of the index, divides them into style sub-groups and places them in one of the four style-differentiated funds.

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