That means the portion that one stock makes up of the total value of the index is proportionate to its market capitalization, or share price times the number of shares a company has outstanding.
Some indexes are just too big for index funds to match exactly.
The Wilshire 5000 Total Market Index actually incorporates prices for more than 7,000 stocks. But funds can come pretty close to tracking these benchmarks by buying the largest stocks in the indexes and just a sampling of smaller ones. The Vanguard Total Stock Market Index Fund, keyed to the Wilshire 5000, recently held 3,354 stocks, for example. As market prices change the weightings of stocks within an index, their matching index-fund portfolios adjust automatically, so managers don't have to buy or sell shares. But when stocks are added to or removed from an index, managers must scramble to follow suit.