S&P 500 Index To Add Dollar General

By
ETF.com Staff
November 27, 2012
Share:

Related ETFs

Ticker Fund name
FPXFirst Trust US IPO
SPYSPDR S&P 500
Related ETF Lists
Alpha-Seeking ETFs, Large Cap ETFs

The S&P 500 Index to get Dollar General as a new member, after Cooper Industries is acquired.

Dollar General Corp., the Goodlettsville, Tenn.-based discount retailer, will be added to the S&P 500 Index after the close on Nov. 30, replacing global electrical products manufacturer Cooper Industries, which is being acquired by industrials giant Eaton Corp.

Eaton’s acquisition of Cooper should be completed sometime around that date, pending final approval, S&P Dow Jones said in a press release. According to the index’s inclusion criteria, companies that are involved in mergers and acquisitions or “significant restructuring” might no longer qualify for the index, and are therefore deleted.

In this case, Cooper’s deletion from the largest U.S.-equities benchmark is opening the way for $16.45 billion Dollar General to step in. The firm would join other consumer discretionary names now representing some 11.4 percent of the S&P 500 Index. Cooper is an industrial-sector name, and industrials snag about 10 percent of the mix.

Dollar General, by and large, isn’t a prominent holding in too many ETFs, the exception being the First Trust U.S. IPO Index Fund (NYSEArca: FPX), which allocates nearly 3 percent of its portfolio to the retailer, ranking it among its top 10 holdings. But its inclusion into the S&P 500 Index would propel it into several portfolios that track the benchmark, including the $109 billion SPDR S&P 500 ETF (NYSEArca: SPY), the largest ETF in the world.

The S&P 500 Footprint

In all, more than $4.8 trillion is benchmarked to the S&P 500, with index assets representing about $1.1 trillion of that total, according to data provided by S&P Dow Jones.

To qualify for inclusion in the S&P 500 Index, companies must have a minimum unadjusted market capitalization of $4 billion, as well as meet liquidity, price, public float and financial viability requirements, among other criteria, according to the S&P Dow Jones Indices website.

Changes to the index are made “as needed, with no annual or semi-annual reconstitution,” the company said on its website.

Eaton first announced its $11.46 billion buyout of Cooper in May in a deal that would expand Eaton’s footprint in the electrical power and distribution industry globally.

 

ETF.COM CHANNELS

Trying to figure out alternatives ETFs? Use our alternatives ETFs channel, library and ETF screener!

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

'JNK' and 'BSV' led ETF creations Friday, Aug. 28, as investors piled into fixed-income ETFs at the expense of equity funds.

'QQQ' and 'SPLV' paced Invesco PowerShares' issuer-leading outflows Friday, Aug. 28, as total U.S.-listed ETF assets hit $2.039 trillion.

ETF.COM ANALYST BLOGS

By Dave Nadig

With many ETFs currently trading well off fair value, what’s an ETF investor to do? Don’t panic.

By Matt Hougan

Out-of-favor funds can bring attractive returns.

By Matt Hougan

New data from Charles Schwab show that the death of mutual funds is happening faster than we thought.

By Dave Nadig

Grab the popcorn. Precidian just doubled-down on its nontransparent active ETF proposal with the SEC this morning.

ETF INDUSTRY PERSPECTIVE

By John Del Vecchio

An index that goes long financially sound companies and shorts the ones with problematic balance sheets.

By Dan Draper

The nature of retirement is changing. How can investors adapt?

By Invesco PowerShares

A more in-depth look at the smart-beta survey's results.