Good news for the Dow, bad news for Apple?

Good news for the Dow, bad news for Apple?

Having missed out on Apple' (NASDAQ: AAPL)s meteoric gains for several years, investors in the Dow's ETF (NYSE Arca: DIA) and various mutual funds may be cheering the news of the tech company's long-awaited inclusion in the famous blue-chip index.

For many years, despite being the largest company by market cap, Apple's lofty share price made it prohibitive for it to be added to the price-weighted Dow. With its shares priced at well over $600 last spring, Apple would have had an extremely disproportionate impact on the Dow, which gives higher-priced stocks more influence on the index's performance.

That all changed last June, when Apple executed its 7-for-1 stock split, bringing its price much more in line with other Dow components.

Read More AT&T shareholders should rejoice at Dow removal

The absence of Apple's high-flying stock in the Dow has caused it to significantly underperform the other major benchmarks, including the S&P 500 (CME:Index and Options Market: .INX) and Nasdaq composite (NASDAQ: .IXIC), both of which have contained Apple's stock.

In fact, if Apple had replaced AT&T (NYSE: T) in the Dow when its stock split last June, Reuters data show that the Dow would have been about 200 points higher than its current levels.

However, while Dow investors may be embracing the addition of Apple in the index, the tech giant's shareholders will certainly hope that Apple doesn't suffer a similar fate as the other three Nasdaq-listed Dow stocks Microsoft (NASDAQ: MSFT) and Intel (NASDAQ: INTC) (both added in November 1999, and Cisco Systems (NASDAQ: CSCO) (added in June 2009). All three of those tech stocks declined in the three years after their inclusion in the Dow, all severely underperforming the index.

Read More Apple to replace AT&T in the Dow Jones industrial average



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