Dow Jones Global Indexes – Definition

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Dow Jones Global Indexes [Indices] Definition

The Dow Jones Global Indexes (indices) are market-capitalization weighted indexes that reflect the price changes of the stocks of different national and international firms from across 29 countries. There are around 5,500 firms listed on the index among which around 700 are based in the United States.

A Little More on What are the Dow Jones Global Indices

It is maintained by Dow Jones Indexes a unit of Dow Jones & Company. The Dow Jones & Company is one of the largest business and financial news company in the world and considered to be one of the most reliable sources of international financial news. Charles Dow, Edward T. Jones and Charles Bergstresser founded the company in 1896. Seven years prior to that they founded the celebrated financial publication The WallStreet Journal which continues to be one of the most influential publication in this sector.

Among the other indexes the Dow Jones Industrial Average is most well accepted index in the world. There is world, region and country based indexes. The indexes are also segregated as economic sector, market sector and industry group.

The Dow Jones Indexes represent 95% of market capitalization at country level for the developed world. This includes the indexes for the United States, Canada, Hong Kong, Singapore, Japan, Australia/New Zealand. In Europe a single index covers all Western European nations, representing 95% of the aggregate market. The developing economy markets index represent 10 countries in Latina America and Asia. Each of these three groups have large-cap, mid-cap and small-cap indexes.

References for Dow Jones Global Indexes

Academic Research on Dow Jones Global Indexes [indices]

  • ●      Dow Jones sustainability group index: A global benchmark for corporate sustainability, Knoepfel, I. (2001). Corporate Environmental Strategy8(1), 6-15. This paper provides all the necessary information about the Dow Jones Sustainability Group Index (DJSGI) and its processes.
  • ●      Global standards and ethical stock indexes: The case of the Dow Jones Sustainability Stoxx Index, Consolandi, C., Jaiswal-Dale, A., Poggiani, E., & Vercelli, A. (2009). Journal of Business Ethics87(1), 185-197. This research investigates the impact of CSR on asset allocation activities in a firm. It investigates the actions which investors have to make in order to maintain a high ethical profile or portfolio and also made standard returns from trades.
  • ●      What does the performance of the Dow Jones Sustainability Group Index tell us?, Cerin, P., & Dobers, P. (2001). EcoManagement and Auditing: The Journal of Corporate Environmental Management8(3), 123-133. This research explores the performance of the Dow Jones Sustainability Group Index. The main objective is to show the distinctions between the DJSGI and the DJGI, and thus, the transparency of the DJSGI.
  • ●      Islamic investment: Evidence from Dow Jones and FTSE indices, Hussein, K. A. (2007). Islamic Economics and Finance, 387. This paper examines the impact of the Shariah screening on the performance of FTSE Global Islamic index and Dow Jones Islamic Market Index (DJIMI) using a number of performance measurement techniques. The objective is to prove that returns from the FTSE and the DJIMI are in no way inferior to that of other indices.
  • ●      Sustainability in the boardroom: An empirical examination of Dow Jones Sustainability World Index leaders, Enric Ricart, J., Ángel Rodríguez, M., & Sánchez, P. (2005). Corporate Governance: the international journal of business in society5(3), 24-41. Although an extensive body of research treats the fields of corporate governance and sustainable development separately, less attention has been paid to the interaction between both fields. This paper attempts to bridge this gap by examining how corporate governance systems are evolving in order to integrate sustainable development thinking into them.
  • ●      Faith-based ethical investing: the case of Dow Jones Islamic indexes, Hassan, K. M., & Girard, E. (2010).  This paper examines the performance of seven Dow Jones Industrial Market (DJIM) indices against their numerous counterparts. The objective is to show that there is no distinction between returns and performance of Islamic and Non-Islamic indexes.
  • ●      Efficiency and dynamics of Islamic investment: evidence of geopolitical effects on Dow Jones Islamic market indexes, Guyot, A. (2011). Emerging Markets Finance and Trade47(6), 24-45. The aim of this article is to show that the application of the Shariah Criteria in the Dow Jones Islamic Market indexes does not affect investment allocation. It also aims to show that investors in the Islamic market do not need to bear an additional cost, however, geopolitical restrictions may reduce returns.
  • ●      Corporate sustainability ratings: an investigation into how corporations use the Dow Jones Sustainability Index, Searcy, C., & Elkhawas, D. (2012). Journal of Cleaner Production35, 79-92. The purpose of this paper is to explore the use of the Dow Jones Sustainability Index (DJSI), with an emphasis on Canadian corporations. 24 Canadian firms were studied, and different results were drawn from their use of the Dow Jones Sustainability Index, as were as various suggestions.
  • ●      Another look at the role of the industrial structure of markets for international diversification strategies1, Griffin, J. M., & Karolyi, G. A. (1998). Journal of financial economics50(3), 351-373. This article investigates the extent to which profits from international tradings are due to the difference in industry structures across nations. To achieve this, 66 samples are collected from the 22 nations in Dow Jones World Stock Index as case study. Results from these data show that the industrial composition of a nation has little to no impact on their index returns. More details are given in the article.
  • ●      Linkages and co-movement between international stock market returns: Case of Dow Jones Islamic Dubai Financial Market index, el Alaoui, A. O., Dewandaru, G., Rosly, S. A., & Masih, M. (2015). Journal of International Financial Markets, Institutions and Money36, 53-70. This research examines the co-movement dynamics at different horizons and time scales of the Dow Jones Dubai Financial market using the discrete and continuous wavelet techniques. It also examines the impact of the London Interbank Offered Rate (LIBOR) on the Islamic DFM-UAE exchange. The objective of this research is to show the impact of overnight LIBOR on Islamic stock returns. It also aims to show that these returns are dependent on different market variables.
  • ●      Are Dow Jones Islamic equity indices exposed to interest rate risk?, Shamsuddin, A. (2014). Economic Modelling39, 273-281. This research explores the interest rate risk of the Dow Jones Islamic Market Indices (DJIMI) sector due to their restrictions on trading certain stocks. Results however are contrary to the blunt understanding that interest rates would be at risks, as studies show that Islamic sectors have a lesser rate risk when compared to other Dow Jones World Sector.

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