Bespoke Investment Group wonders where the Dow Jones industrial average would be if it had included Apple Inc. AAPL-Q among its 30 members in 2009, when the index masters removed General Motors and ultimately decided to replace the car maker with Cisco Systems Inc. The answer: 14,636.
The Dow sits at about 12,865 right now, which is about 12 per cent below its record high in 2007. But Apple shares have more than tripled since 2009, when they traded at $143. Sure, a lot of this is just wishful hindsight – and as Bespoke pointed out, Apple shares today would hog about a 20 per cent weighting within the Dow, which wouldn’t be healthy.
What’s interesting, though, is that Apple is a member of the S&P 500 – often sitting at the top of the index in terms of its weighing, given its ballooning market capitalization. Yet, even though the S&P 500 has Apple and the Dow doesn’t, the narrow blue-chip index has been thrashing the S&P 500 for some time.
Last year, the S&P 500 rose 2.1 per cent, after including dividends, or about a quarter of the 8.3 per cent gain by the Dow. And over the past five years, the S&P 500 has risen just 1.7 per cent, versus 14.8 per cent for the Dow (also after factoring in dividends.) This year, so far at least, the S&P 500 has managed to pull ahead: It has risen 7.4 per cent, or two percentage points ahead of the Dow’s 5.4 per cent gain.
