What would the Dow look like if it included Apple?

Mon Mar 2, 2015 10:41am EST
 
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By Rodrigo Campos and Chuck Mikolajczak

NEW YORK (Reuters) - It may be by far the most valuable American company but Apple Inc still can’t get into at least one exclusive club – the 30-member Dow Jones Industrial Average.

That may not be a problem for the company behind the iPhone and the iPad, after all Apple shares recently hit record highs. It is, though, hurting those who tie their investments to the performance of the venerable Dow, which was first calculated in 1896 and is still probably the best-known stock index in the world.

Since Apple split its shares seven-for-one last June 6, it’s delivered investors a gain of more than 43 percent including dividend payments, and that has contributed almost one third of the Nasdaq 100’s return of 18.6 percent, according to ETF.com. By comparison, the Dow’s total return has been only 8.97 percent over that period, and it has also underperformed the S&P500 – which does include Apple – and has a 9.56 percent return. 

Had Apple been substituted for 29 of the 30 Dow components last June, the index would have been higher. The only Dow member that would have had more of a positive influence on the index than Apple is Visa. If Apple had replaced a badly lagging stock such as IBM, which has dropped more than 13 percent since Apple’s split, the Dow would now be about 450 points higher than its Friday close at 18132.70 (and have gained 9.8 percent rather than the 7.1 percent increase it has recorded, without dividends).

(For an interactive graphic on how if Apple had been substituted for almost all of the Dow's 30 components, the index would be higher, click here: reut.rs/1DK9ra0)

INDEX CHANGES RARE   Continued...

 
The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo June 26, 2014. Picture taken June 26. REUTERS/Yuya Shino