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Who Says Indices Aren’t Actively Managed?

From the desk of Matt Mondoux, CFA, CMT, CFP®

The Dow Jones Industrial Average (the “Dow”) experienced a significant rebalance today. Raytheon and ExxonMobil, two of the longest tenured members of the index dating back to the 1930’s, and pharma giant, Pfizer, have been removed. Replacing those three are Salesforce, Amgen and Honeywell – which due to the price weighted calculation of the Dow are now all in the top 10 holdings. Who says indices aren’t actively managed?