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| Dow Jones Utilities Average |
Overview:
The Dow Jones Utilities Average (DJUA) is the most widely cited utilities index
in the U.S. Started in January 1929, it is also the third oldest of the Dow
Jones Averages.
Composition:
The Dow Jones Utilities Average is comprised of fifteen of the largest utilities
companies in the United States. This index, like most other Dow Jones Averages,
is price weighted. This means that firms with the highest stock prices will have
the greatest impact on the index's value (regardless of the underlying company's
actual size).
The table below lists the components of the Dow
Jones Utilities Average along with the weighting that each stock carries in the
index (data as of August 2004):
| Company |
Symbol |
%
of Index |
| Dominion Resources |
D |
14.0% |
| Consolidated Edison |
ED |
9.0% |
| Public Service Enterprise |
PEG |
9.0% |
| TXU Corp. |
TXU |
8.8% |
| FirstEnergy |
FE |
8.7% |
| Excelon |
EXC |
8.1% |
| American Electric Power |
AEP |
7.0% |
| Southern Co. |
SO |
6.6% |
| PG&E Corp. |
PCG |
6.3% |
| Edison International |
EIX |
6.0% |
| Duke Energy |
DUK |
4.9% |
| NiSource |
NI |
4.6% |
| Williams Cos. |
WMB |
2.6% |
| CenterPoint Energy |
CNP |
2.5% |
| AES Corp. |
AES |
2.1% |
Positives:
No other utility index is as widely followed as the Dow Jones Utilities Average.
This index includes virtually all of the nation's leading utility firms.
Drawbacks:
Many investors believe that a price-weighted index can distort the actual
returns posted by a sector because the firms with the largest market value
usually don't have the largest impact on the index’s value. Like its close
cousin, the Dow Jones Transportation Average, the Utilities Average has become
less cited over the years as investors have shifted their attention toward
technology and service stocks.
How can I trade/invest in this index?
You can invest in the Dow Jones Utilities Average through either options,
futures, or a variety of different funds. However, our recommended investment
vehicle is the iShares Dow Jones U.S. Utilities Fund (IDU). This exchange-traded
fund (ETF) almost perfectly tracks the Utilities Average, sports a low 0.6%
expense ratio, and can be easily traded during market hours just like a common
stock.
Additional Information:
iShares
Dow Jones U.S. Utilities Fund (IDU)
Dow
Jones Averages Homepage
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