There has been a significant increase in the repurchase of shares by companies
There are fewer stocks to chose from in the U.S. equity markets
Ben Carlson notes in his piece,
"Developed in the summer of 1974, the yet to be named Wilshire 5000 Equity Index had just shy of 5,000 issues — thus the number 5,000 was made part of the name to convey the breadth of the index’s coverage. The Wilshire 5000 membership count has ranged from 3,069 on February 28,1971 to 7,562 on July 31, 1998. Since then, the count has steadily fallen to 3,776 on December 31, 2013 before climbing to 3,818 as of September 30, 2014. The last time the Wilshire 5000 had more than 5,000 companies was December 29, 2005."
So why such a decline in the number of stocks? Below are a few theories
Increase in mergers and acquisitions
Businesses fail on a regular basis
Choice of private companies to stay private which could be related to