When Buddha Hits Enlightenment, Sell!

Dow Jones and an India-based company Dharma Investments have created a new financial index that is going to be based on the dharmic principles of Buddhism and Hinduism. No, that does not mean that you can invest in the stock of gods, but the index will consist of companies that abide by the principles of Hinduism and Buddhism. Apparently, there are already several indices (including one by Dow Jones) that track companies compliant with the Islamic Sharia, so why should the other religions be left behind?

Global index provider Dow Jones Indexes and Dharma Investments, a private investment firm, today announced the launch of the Dow Jones Dharma Indexes measuring the performance of companies selected according to the value systems and principles of dharmic religions, especially Hinduism and Buddhism.

The series includes the Dow Jones Dharma Global Index and four country Indexes for US, UK, Japan and India. The indices are designed to track financial products such as exchange-traded funds and other investable products that enable investors to participate in the performance of companies compliant with dharmic traditions. [BusinessStandard]

So what constitutes as “dharmic”? Well, it’s easier to start with what’s not dharmic:

Excluded from the index are companies from sectors that are deemed unacceptable due to the nature of their business activities and operations. Excluded are also companies that have exposure to unacceptable business practices. Some examples of unacceptable sectors are aerospace and defense, brewers, casinos and gaming, pharmaceuticals, tobacco. Some examples for unacceptable business practices are alcohol, adult entertainment, animal testing and genetic modification of agricultural products. [AlBawaba]

It seems that touting your company as “socially responsible” is a big draw for investors all around the world. I suppose that’s a good thing.

Worldwide, socially responsible investing (SRI), as it is known, has taken off in a big way with assets increasing from $639 billion in 1995 to $2.29 trillion in 2005. In the US, SRI assets represent over 10% of the total assets under management. [BusinessStandard]

So being listed on the Dharmic Index would mean that your company can adopt a holier-than-thou attitude towards the competition. The Economic Times has a quote from the CEO of Dharma Investments, with an interesting typo.

“The Down Jones Dharma Indexes bring together a combination of environmental, social, governance and traditional sin sector filters.

As such, the index is unique and will not just have appeal to the religious, but to a far broader audience as well,” Dharma Investments CEO Nitesh Gor told the media. [EconomicTimes]

What exactly is a “traditional sin” anyway? And what’s a non-traditional one, for that matter?

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2 comments for “When Buddha Hits Enlightenment, Sell!

  1. February 26, 2008 at 6:18 am

    I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Chris Moran

  2. February 27, 2008 at 7:35 am

    In case you don’t know, research in the area of ethical investing by numerous institutions — including a major study completed last year by the United Nations Environmental Program’s Finance Initiative — concluded that it provides returns comparable to, or better than, ‘conventional’ investing.

    I believe that if everyone does invest according to their personal values, then, since so many of our core values are alike — and are supportive of higher ideals — that in the long run, only companies employing these higher values will truly prosper.

    Incidentally, I’ve been following ethical investing for forty years. For readers interested in the latest ethical investing news and research, they might find my site quite helpful. It’s at http://investingforthesoul.com/

    Best wishes, Ron Robins

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