June 01, 2009 at 3:00 pm by Tom Lydon
A new index presented by Dow Jones Indexes plans on riding the coattails of the economic stimulus proposed by President Barack Obama, leaving an area of the market open for new exchange traded funds (ETFs) to track it.Dow Jones Indexes announced the launch of their new index, Dow Jones U.S. Economic Stimulus Index, which will draw on the money invested in the American Recovery and Reinvestment Act of 2009. According to the Globe NewsWire press release, the index will measure the performance of companies drawn from industries that are expected to receive stimulus dollars from the proposed economic stimulus package.
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 the index, a company must be a component of the Dow Jones U.S. Total Stock Market Index, must have been trading for at least three months with an average daily trading volume of $5 million and must fall under one of the six categories above.
The 50-stock index is aimed at capturing the movements of the largest and most liquid stocks in six economic categories. According to the free-float market capitalization, the top five companies are: Microsoft Corp. (MSFT), AT&T Inc. (T), General Electric Co. (GE), International Business Machines Corp. (IBM) and Cisco Systems Inc. (CSCO).
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