Big news on The Street today as Dow Jones Indices may be top-ticking yet another tech darling after a dramatic run-up to a record market cap. The Dow Jones Industrial Average has become famous over the years for adding names at or near generational peaks – and technology names in particular – after they’ve already been rewarding shareholders for years (decades).
But this is what the average was meant to do since the beginning (when it was mostly railroads and horse manure processors) – own the biggest and best companies in their respective fields, which means a lot of backward thinking, when it comes down to it.
Fun Fact: Apple is the first-ever offshore hedge fund to be added to the storied DJIA
— Downtown Josh Brown (@ReformedBroker) March 6, 2015
Here’s ETF Trends’ Todd Schriber:
In perhaps the biggest addition to 130-year old blue chip index, the Dow Jones Industrial Average will add Apple (NasdaqGS: AAPL) after the close of trading on March 18. The addition of Apple, the world’s largest company by market value, comes at the expense of AT&T (NYSE: T).
Whether by way of the old American Telephone & Telegraph Co. or its current incarnation, AT&T has been a member of the Dow since 1939.
Apple will enter DIA as the ETF’s fifth-largest holding behind Goldman Sachs (NYSE: GS), 3M (NYSE: MMM), International Business Machines (NYSE: IBM) and Boeing (NYSE: BA).
Schriber goes on to point out that AT&T wasn’t replaced because it was the smallest weighting in the Dow (three other stocks are smaller) – rather it was replaced because of the huge overweight toward telecom it would represent side-by-side with Apple’s iPhone business.
You can just picture the ebullience over at Foxconn upon hearing the news. One imagines the cellphone assemblers jumping up and down as though the Death Star just exploded over Endor.