Investors may be surprised at just how much price risk is embedded in today’s benchmark indices.
By Simon Hallett, CFA, Co-Chief Investment Officer, Harding Loevner
A couple of months ago, Exxon was summarily dropped from the Dow Jones Industrial Index, after having been included in the index since its inception 92 years ago, to be replaced by software giant salesforce.com. Exxon’s deletion, in itself, was not a big deal for investors. Despite its iconic place in the investor psyche, the Dow is not a great proxy for the broad U.S. stock market or widely used as a benchmark for investing.
But that a company once as dominant as Exxon could see its ...