Dow Jones Indexes Teams for Dharmic Initiative

Investors looking for a new measure of socially responsive portfolios can now tap into one that purports to track the performance of companies that adhere to Dharmic principles.

The Dow Jones Dharma Indexes is a result of the collaboration of Dow Jones Indexes and Dharma Investments, a private investment firm pioneering the development of faith-based investment. The new indexes measure the performance of companies selected according to the value systems and principles of Dharmic religions, especially Hinduism and Buddhism.

The Dow Jones Dharma Index series includes the Dow Jones Dharma Global Index, as well as four country indexes for the U.S., the U.K., Japan and India. According to a press release, the indexes are designed to underlie financial products such as exchange-traded funds and other investable products that enable investors to participate in the performance of companies which are compliant with Dharmic religious traditions.

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The index universe for the Dow Jones Dharma Indexes is defined as the top 5,000 components of the Dow Jones Wilshire Global Total Market Index as measured by float adjusted market capitalization, and all components in the Dow Jones Wilshire India Index. To be included in the Dow Jones Dharma Indexes, stocks must pass a set of industry, environmental, corporate governance and qualitative screens for Dharmic compliance.

Industry, Company Screens

Industry screens include unacceptable sectors and business practices. Environmental screens take account of a company’s impact or policies with respect to emissions, climate change and carbon footprint analysis, oil and chemical spills and waste management and recycling. Corporate Governance screens comprise the handling of labor relations/disputes/discrimination allegations, human rights violations, working conditions/wages.

Excluded from the index are companies from sectors that are deemed unacceptable due to the nature of their business activities and operations, including aerospace and defense, brewers, casinos and gaming, pharmaceuticals, tobacco. Also excluded are companies that have exposure to what are deemed unacceptable business practices, including alcohol, adult entertainment, animal testing and genetic modification of agricultural products.

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