The S&P 500 and the Dow have tumbled over the past year, but here's one unlikely index that's posting respectable returns: the Dow Jones 2008 Summer Games index.
The index, which tracks 37 stocks of companies that are official partners, sponsors, and suppliers of the Beijing 2008 Olympic Games, is up 8 percent over the 12-month period that ended June 30. From its December 31, 2006, inception, the index has gained an annualized 14 percent.
This is interesting, because roughly a quarter of the index resides in consumer goods, a sector that has suffered over the past year. In terms of countries, more than 60 percent of the index is made up of U.S. companies, followed by 12 percent in Hong Kong and 10 percent in Australia. Top names in the portfolio include BHP Billiton, Johnson & Johnson, Coca-Cola, and Microsoft. John Heinzl of Toronto's Globe and Mail points out that the sorts of companies that are likely to be Olympic sponsors tend to be global industry leaders with solid balance sheets, rising dividends, and strong brands. It also doesn't hurt that the index has a relatively small weighting in the flagging financial sector.