Who Owns the Dow Jones Industrial Average?

The Dow Jones Industrial Average (DJIA) is one of the most recognized and respected stock market indices in the world. But have you ever wondered who owns it and who is responsible for its day-to-day operations, including the calculation and data management?

The Founding and Early Years

The Dow Jones Industrial Average was first created by Charles Dow, the founder of the Wall Street Journal, in 1896. The original index was designed to reflect the industrial sector’s performance with a focus on ten leading companies at the time. Over the years, the average has evolved, and currently, it consists of thirty large publicly-owned companies in key American industries.

Modern Ownership and Management

While the historical roots of the DJIA are traced back to its founder, Charles Dow, modern ownership and management have undergone significant changes. In 1991, the Dow Jones Company Inc., the company founded by Charles Dow, merged with Dow Jones Company Inc., which was a separate entity. Subsequently, the company became known as the current Dow Jones Company Inc..

The DJIA was then included in a joint venture named SP Global, CME Group, and SPIndices LLC. In 2014, SP Indices LLC was formed as a joint venture between SP Dow Jones Indices, LLC (SDJ), the largest provider of financial market indices, and CME Group, a leading derivatives marketplace. This joint venture, known as SP Joint Indices LLC, now oversees the Dow Jones Industrial Average and manages its calculation, data storage, and distribution.

Copyright and Legal Rights

The Dow Jones Industrial Average is not just an index but also a copyrighted work. The copyright is held by its current legal owners, SP Joint Indices LLC. The calculation and daily updates of the index are performed by a specialized team within the company, ensuring the accuracy and reliability of the data.

Responsibility for Calculation and Data Management

The Contact and Role of SP Joint Indices LLC in calculating and managing the Dow Jones Industrial Average include:

Calculation Methodology: SP Joint Indices LLC uses a specific calculation methodology to determine the value of the DJIA. This involves a modified Dow divisor and the closing prices of the component stocks. Data Collection: The company collects closing prices from the New York Stock Exchange (NYSE) and Nasdaq, ensuring the accuracy of the data. Correction and Adjustment: SP Joint Indices LLC makes necessary corrections to the index to account for changes in the component companies, such as mergers, acquisitions, and spin-offs. Any adjustments are made in a transparent and fair manner. Release Schedule: The index is released daily based on the closing prices, providing investors with timely and reliable information. Regulatory Compliance: The company ensures that the calculation and distribution of the index comply with all relevant regulatory requirements.

Conclusion

While the Dow Jones Industrial Average has a rich history and has been a vital part of the financial landscape for over a century, its current ownership and management are complex. SP Joint Indices LLC, as the legal owner, is responsible for the accurate and reliable calculation and management of the index. This ensures that investors, analysts, and financial professionals around the world can rely on the DJIA as a benchmark for the performance of the U.S. stock market.