.jpg)
Dow Jones Indexes, a leading global index provider, today announce the launch of the Dow Jones U.S. Economic Stimulus Index. The index measures the performance of leading U.S. companies drawn from industries that are expected to receive stimulus dollars from the American Recovery and Reinvestment Act of 2009. The 50-stock Dow Jones U.S. Economic Stimulus Index seeks to capture the "momentum" of the U.S. economic stimulus package and its effect on the largest and most liquid stocks in six economic segments.
"The American Recovery and Reinvestment Act represents a significant strategic investment in the U.S. economy and as such is anticipated to have a positive impact on the stock market, which is an indicator of economic health," said Michael A. Petronella, president, Dow Jones Indexes. "Applying a systematic methodology and blue-chip approach to the segments of the American Recovery and Reinvestment Act makes the Dow Jones U.S. Economic Stimulus Index an attractive underlying for investment products such as exchange-traded funds."
Dow Jones Indexes mapped the key areas targeted by the American Recovery and Reinvestment Act to six core categories: Alternative Energy, Construction & Materials, Energy Grid, Environment, Technology, Telecom/Internet.
To be eligible for inclusion, a company must be a component of the Dow Jones U.S. Total Stock Market Index, must have a three-month minimum average daily trading volume of $5 million and must be categorized in one of the six categories determined by Dow Jones Indexes. Within each of the six categories, stocks are selected top-down based on float-adjusted market capitalization until the target component count per category is achieved. The number of components is determined based on the percentage of stimulus dollars allocated to each category. Of the 50 index components 20 are derived from the category Construction & Materials, 10 components from Alternative Energy, and five components from each of the remaining categories Energy Grid, Environment, Technology and Telecom/Internet.
The top five index components by free-float market capitalization are Microsoft Corp. (category: Technology), AT&T Inc. (category: Telecom/Internet), General Electric Co. (category: Alternative Energy), International Business Machines Corp. (category: Technology), and Cisco Systems Inc. (category: Telecom/Internet).
As of May 26, 2009 the Dow Jones U.S. Economic Stimulus Index is up 1.62% since its inception on December 31, 2008(1).
(1)The Dow Jones U.S. Economic Stimulus Index was first published on May 21. All estimated daily historical closing prices prior to that date are based on back-testing (i.e., calculations of how the index might have performed in the past if it had existed). Backtested performance information is purely hypothetical and is solely for informational purposes. Backtested performance does not represent actual performance, and past performance is not indicative of future results.
