An Index of the World’s Most Influential Corporations

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The Global Dow is a stock index consisting of 150 of the most influential corporations around the world. Unlike the Dow Jones Industrial Average. the Global Dow tracks leading companies from around the world with a focus on developed and emerging markets, as well as new emerging industries like alternative energy.

Selecting Global Dow Stocks

The Global Dow is managed by the Dow Jones & Company and the CME Group. With input from the Managing Editor of the Wall Street Journal, the head of Dow Jones Indexes research, and the head of CME Group research, the Global Dow stocks are selected without any quantitative rules based on reputation, growth rates, and investor base.

During the selection process, preference is given to companies with global reach rather than those dealing primarily in their respective domestic markets. The goal is to create an index that reflects, as closely as possible, the global stock market as it is today, in terms of industries and regions, with an emphasis on the global leaders of tomorrow.

Popular Components of the Global Dow

The Global Dow contains many popular companies from around the world, ranging from Amazon.com Inc. (AMZN) in the United States to Vestas Wind Systems in Denmark. But with average 3-year earnings growth of 9.22% and a 30.28% return on equity. the companies are generally of very high quality relative to the market at large.

The top ten holdings include (as of 3/31/12):

• Home Depot Inc. (1.02%)

• Samsung Electronics (1.01%)
• Apple Inc. (1.01%)
• Cai Energ Mg-Cemig (0.94%)
• Intel Corporation (0.90%)
• Visa Inc. (0.90%)
• Anheuser-Busch Inbev (0.88%)
• Wells Fargo & Co. (0.88%)
• Walt Disney Co. (0.87%)
• Ebay Inc. (0.86%)

Investing in the Global Dow

Investors have a couple of options when investing in the Global Dow, including the use of exchange-traded funds (ETFs), purchasing component American Depository Receipts (ADRs), or purchasing component stock directly on foreign exchanges. For most investors, the easiest option is purchasing ETFs that track the Global Dow index.

The only ETF that directly tracks the Global Dow index is the SPDR DJ Global Titans ETF (DGT), which is managed by State Street Global Markets LLC. With a 0.50% gross expense ratio, the ETF is relatively efficiently managed with quarterly distributions. Since inception in September of 2000 through March 31, 2012, the index has returned -1.42% to investors.

As an alternative to purchasing the ETF, some investors prefer to use the Global Dow as a universe of stocks to choose from when purchasing individual equities for their portfolio as either U.S. equities, ADRs, or foreign-listed securities. A complete and updated list of components for this purchase can be found on the Dow Jones website .

A Note on Diversification

Notably, there are more U.S. companies in the Global Dow than any other country, which means that the index is not an optimal way to diversify internationally. Rather, the index is best used as an alternative to U.S.-centric mutual funds or ETFs that provides exposure to global equities. But those looking for an ex-U.S. fund may want to consider the Dow Jones Global ex-U.S. Index.

Dow Jones also publishes and maintains many other global equity indexes that target a number of specific regions, including the Americas, Asia/Pacific, Middle East/Africa and others. Many of these indexes also have associated ETFs operated by companies like iShares or SPDR.