Perhaps even more surprising is that as a price-weighted index, it would have been logical to assume that if the Dow is going to add a new member at the expense of another, Intel (NasdaqGS: INTC), Cisco (NasdaqGS: CSCO) and General Electric (NYSE: GE) would have been candidates for expulsion before AT&T. Coming into Friday, all had smaller weights than AT&T in the Dow and the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA). [Apple Coming to the Dow]
AT&T shareholders and investors in FCOM, IYZ and VOX may not be sad over the stock’s departure from the Dow for too long because history shows stocks that leave the blue chip index go on to deliver stellar returns.
Alcoa (NYSE: AA) nearly doubled in its first year out of the Dow. Hewlett-Packard (NYSE: HPQ) surged 73.4% in its first year out of the index while shares of Altria (NYSE: MO) are up nearly 143% in the seven years since the tobacco giant left the Dow, according to CNBC.
Fidelity MSCI Telecommunication Services Index ETF
