Benchmarking the DJ Wilshire Global Total Market Index

Roger Nusbaum submits: Over the weekend a reader left a question in which he quoted an article about benchmarking to the DJ Wilshire Global Total Market Index instead of the usual suspects like the S&P 500.

I flippantly asked if he had a ticker symbol, as some of these indices are difficult to follow and get information about. He came back with two symbols in the Yahoo Finance format: ^DWGT and ^DWG. These appear to be two separate indices. Yahoo, when I looked, did not have more than 5 days of chart info on either. Further, Yahoo Finance did not have any composition information.

The reader left two links to Dow Jones pages about the index here and here (.pdf).

The PDF had no specific information about what comprised the index, and the first link was a home page of sorts with another link to index information but the page never populated with any information.

The way I look at this, in order to benchmark to an index you need to know the sector weights, in the case of the reader's suggested index -- the country weights, the cap weighting, dividend yield and so forth. The idea of benchmarking is to start with the composition of the index and then make decisions to under-weight, equal-weight or over-weight on every aspect of that index. You also need to be able to routinely revisit the index for changes.

It has been my experience that indices like the one being asked about in this question are difficult to get information on.

A truly global index might include some countries that we cannot invest in. As the discussion moves along, the idea of benchmarking the DJ Wilshire Global Total Market Index seems to get more complicated.

This issue has come up before. I use the S&P 500 which is what most managers use. The S&P 500 has plenty of flaws, and I have not tried to argue otherwise. The S&P is easy to access and follow both for clients and managers and, homeward bias notwithstanding, seems like a logical starting point.

I have about 35% allocated to foreign, and have mentioned quite a few times expecting to increase that by the end of the decade. So it would be a fair argument that I am not really benchmarking SPX, and maybe that's right.

The article referenced in the original comment is not very helpful unless somewhere there are specific country weights, sector weights and so on that are updated very regularly that we can access the information. If anyone knows where this is, please leave a link. Or better yet, the actual info along with the link.