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Dow jones precious metals index is ideal for those who want to track performance of companies engaged in exploration and production of precious metals. Thus if you want to get the benefit of rising global prices of commodities such as gold, silver, diamond and platinum, you can invest in precious metals index of dow jones. This index is a true reflection of price movements of commodities and companies constituting this sector and can be as well regarded as a great alternative way of being a part of this sector.

The uniqueness of precious metal index is that companies need to be engaged in the gold mining sub sector or platinum and precious metals sub sector to constitute a part of the index. Securities also need to be listed in U.S. Capital Stock market and liquidity of stock has to be pretty high to avoid inclusion of penny stocks and low cap companies in the precious metals index. The index thus avoids the possibility of any manipulation. Well capitalized stocks make sure that index is a healthy reflection of the state of affairs of this sector.

Dow Jones precious metals index was published in April 2002 and has given a annualized return of 18.83% since inception. There are 13 companies constituting the metals index and the highest and lowest weightage of a constituent is 21% and 0.17% respectively based on market capitalization.

Barric Gold Corporation is the biggest constituent of the Dow jones precious metals index. 10 out of 13 constituents belong to the god mining industry and the remaining 3 companies to platinum and precious metals industry. With the base value of 100 for the year 2000, index is calculated every 5 minutes during trading hours in the market. This almost real time measurement of index helps you keep a tab on your investment and see its value in a wonderful manner. The free float adjustment factor makes sure that the available stocks for trading are given due importance while calculating the contribution to weightage of the metals index.

Dow jones metals and precious metals index is the property of Dow jones company Inc. and is a great way to see your investments in precious metals go up as the index values rise. While it is true that the performance of the metals index has not been great during last one year, the overall returns have been exceptional. So you can benefit from law of averages and reap the benefits when the precious metals sector sees some great action.

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