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Dow Jones Indexes and Dharma Investments launch new faith-based indices


Dow Jones Indexes and Dharma Investments, a newly-launched private investment firm pioneering the development of faith-based investment, have launched the Dow Jones Dharma Indexes, which m

Dow Jones Indexes and Dharma Investments, a newly-launched private investment firm pioneering the development of faith-based investment, have launched the Dow Jones Dharma Indexes, which measure the performance of companies selected according to the value systems and principles of Dharmic religions, notably Hinduism and Buddhism.

The index series includes the Dow Jones Dharma Global Index, as well as four country indices for the US, UK, Japan and India. The indices are designed to underlie financial products such as exchange-traded funds that enable investors to participate in the performance of companies compliant with Dharmic religious traditions.

The Dow Jones Dharma Index is designed to fill the requirements of a range of investors, including not only Hindus and Buddhists but potentially also Jains and Sikhs, whose religions have as a central tenet the concept of dharma and will therefore find resonance in its investment premises.

‘The Dow Jones Dharma Indexes are the first faith-based indexes created to measure Dharma compliant equities,’ says Michael Petronella, president of Dow Jones Indexes. ‘As faith-based and socially responsible investing continues to grow worldwide, our goal is to provide the investment community with the most comprehensive benchmarks that comply with these principles.

‘The launch of the new Dow Jones Dharma Indexes marks a major step in our effort to further expand our range of faith-based indexes. Dow Jones Indexes pioneered this space by launching the Dow Jones Islamic Market Indexes in 1999 – today the leading Islamic market indices worldwide.’

Nitesh Gor, chief executive of Dharma Investments, says: ‘India and Asia have made remarkable advances economically over the last few years, and in parallel we believe that bringing our religious values onto the global stage offers sustainable solutions to the problems facing the world today. The principle of Dharma contains precepts relevant to good conduct, but also the implicit requirement of mindfulness about the sources of wealth – and therefore responsible investing.

‘The Dow Jones Dharma Index brings together a combination of environmental, social, governance and traditional sin sector filters. The index will have appeal not just to the religious, but to a far broader audience. We are also very grateful to eminent spiritual leaders within the Dharma religions for their continuing involvement and blessings. Their endorsement of this index gives us great confidence in its authority and eventual success.’

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

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 labour relations, disputes and discrimination allegations, human rights violations, working conditions and wages.

Excluded from the index are companies from sectors that are deemed unacceptable due to the nature of their business activities and operations, such as aerospace and defence, brewers, casinos and gaming, pharmaceuticals and tobacco, as well as companies with exposure to unacceptable business practices, such as alcohol, adult entertainment, animal testing and genetic modification of agricultural products.

To ensure the quality of the indices and the integrity of the underlying index methodology, three boards have been established to define, build and implement the screening criteria: the Dow Jones Dharma Academic Advisory Committee, the Dow Jones Dharma Supervisory Board and the Dow Jones Dharma Religious Council.

In 2007, the Dow Jones Dharma Global Index gained 6.21 per cent, while the Dharma India Index gained 81.22 per cent. The Dharma Japan Index was down 4.79 per cent, the Dharma UK Index by 10.11 per cent and the Dharma US Index by 3.62 per cent.

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