Dow Jones ETF

The Dow Jones is the best known market index in the world. That being said, it is also a very peculiar one and it only comprises 30 company stocks. It goes without saying that large publicly traded companies are abundant in the United States, so why promoting an index with only 30 companies in it?

Another distinctive (and strange) trait of the Dow Jones index is its weighing. In fact it is not an entirely justified manner of weighing they use. The Dow Jones is a price-weighted index which means they are not looking at market capitalization but at the ultimate price of an underlying stock.

This implies that a company with few outstanding shares but a high share price counts for much more than a company with 10 times as much shares but with a 50% lower share price. This is very peculiar indeed.

Due to the fact that the Dow comprises only 30 stocks and the above mentioned strange way of weighing many investors do not prefer a Dow Jones ETF as a means of trading the US stock markets. They choose the S&P 500 index instead.

It is not that the companies included in the Dow Jones are not interesting, not at all, within the DJI you will find companies such as Apple, Boeing, Microsoft, McDonalds, Intel and Coca Cola.

In general the companies in the Dow Jones are also good in paying large dividends. All in all I myself think that the Dow Jones is a very fine market index to trade in, especially in buying for the long term after a substantial market correction.

Lyxor Dow Jones Industrial Average UCITS ETF

With the Lyxor Dow Jones Industrial Average UCITS ETF I have opted for a European based ETF with quotations in Euro’s. It is a synthetic ETF by means of swap which implies that it tracks the Dow Jones as exactly as possible.

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