Dow Jones Precious Metals Index Components

by Cam Merritt
The Dow Jones Precious Metals Index includes many of the world's largest gold producers.

The Dow Jones Precious Metals Index includes many of the world's largest gold producers.

The Dow Jones Precious Metals Index includes 14 companies involved in the production of gold, silver and "platinum-group" metals, which include not only platinum but also other rare elements such as iridium and palladium. The index consists of a handful of large companies -- as of late 2011, five stocks accounted for just under 80 percent of the index -- and a scattering of smaller ones. Dow Jones has been tracking the index since April 2002.

Criteria for Inclusion

To be included on the index, a company must be involved in the exploration for or the mining of gold, silver and platinum-group metals. Dow Jones maintains a proprietary classification system that assigns companies to industry sectors; for the precious metals index, it chooses companies from either the "Gold Mining Subsector" or the "Platinum & Precious Metals Subsector." The selected companies must have stocks -- or, in the case of certain foreign companies, American Depository Receipts -- that trade on a U.S. exchange. Dow Jones reviews the companies periodically, removing the smallest and least-liquid stocks and replacing them with stronger ones.

The Big Five

Companies on the Dow Jones Precious Metals Index are weighted according to size and market capitalization. As of late 2011, the five largest stocks, with their share of the index, were: Barrick Gold Corp., based in Toronto, at 22.67 percent; Goldcorp Inc., of Vancouver, British Columbia, at 18.57 percent; Freeport-McMoRan Copper & Gold Inc., of Phoenix, at 15.96 percent; Newmont Mining Corp., of Denver, at 14.26 percent; and AngloGold Ashanti Ltd., of Johannesburg, at 7.76 percent.

The Next Five

The next five largest components of the index, as of late 2011, were Gold Fields Ltd., of Johannesburg, at 4.86 percent; RandGold Resources Ltd., based in the British dependency of Jersey, at 4.17 percent; Agnico-Eagle Mines Ltd., of Toronto, at 3.25 percent; Compania de Minas Buenaventura S.A., of Lima, Peru, at 2.66 percent; and Harmony Gold Mining Co. Ltd., of Melrose Arch, South Africa, at 2.16 percent.

At the Bottom

Because the stocks at the bottom of the index are subject to churn, Dow Jones' public materials identify only the 10 biggest. The smallest companies each account for only a small fraction of the index value; as of late 2011, the smallest stock -- unidentified -- represented just 0.16 percent. That's less than two-thousandths of the total index.

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