The Dow Jones Industrial Average just turned 125 today. But it’s amazing how few of the original members survived.
Not one of the original 12 members of the Dow when it launched on May 26, 1896, are still on the Dow Jones Industrial Average, shows an analysis by S&P Dow Jones Indices. General Electric (GE) was the last removed in 2018. There are now 30 Dow stocks, which are investable using the SPDR Dow Jones Industrial Average ETF Trust (DIA).
Seeing so much tumult in arguably the most recognized market measure is a reminder of how benchmarks change over time, sometimes radically. It’s also a sign of how market leadership is volatile. Companies that don’t evolve and change fall aside. That’s why it’s important to find the leaders, rather than cling to the past.
Where Are They Now? Original Dow Jones Members
|Company||Where are they now?|
|American Cotton Oil||Distant ancestor of Best Foods|
|American Sugar||Evolved into Amstar Holdings|
|American Tobacco||Broken up in 1911 antitrust action|
|Chicago Gas||Absorbed by Peoples Gas in 1897|
|Distilling and Cattle Feeding||Whiskey trust evolved into Millennium Chemicals|
|General Electric||Still active though last removed from DJIA in 2018|
|Laclede Gas||Still active though removed from DJIA in 1899|
|National Lead||Removed from DJIA in 1914|
|North American||Utility combine broken up in 1940s|
|Tennessee Coal & Iron||Absorbed by U.S. Steel in 1907|
|U.S. Leather||Liquidated in 1952|
|U.S. Rubber||Became Uniroyal and now part of Michelin|
Source: S&P Dow Jones Indices
The Dow Jones Today Looks Totally Different
Expanding to 30 stocks isn’t the only change to the Dow Jones. The sector breakdown is completely different.
The technology sector now accounts for a larger slice of the Dow Jones than any other: 20.8%. And that’s closely followed by a 17.4% slice in health care. Industrials, which the Dow Jones originally tracked, is only the third most important sector at 17.3%. Utilities are now nonexistent. Although the Dow Jones holds a 4.4% weight in communications services.
The Dow Jones also stands out in the fact that it gives higher priced stocks the greatest weightings. That means UnitedHealth (UNH), with a stock price of 413, holds the largest weight at 7.9%. And Cisco Systems (CSCO), trading for just 53, holds the smallest weight at 1%.
Lots Of Indexes To Invest In
The Dow Jones might be a popular way to watch the market. But it’s not necessarily the top performing.
Even following a rally in industrials this year, and the addition of top tech stocks over the years, the SPDR Dow Jones Industrial Average ETF gained 10.3% annually in the past 15 years and 16.5% in the past five, says Morningstar.
Both the Dow Jones and S&P 500, though, can’t keep up with the high-octane Invesco QQQ Trust (QQQ), especially following a powerful rally in big-cap tech the past decade. The QQQ is up 16.3% annually the past 15 years and a whopping 25.0% annually in the past five.
But who knows what the next 125 years will bring?
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