Dow Jones Industrial Average (DJIA) Explained: A Guide to the US 30

US 30

The US 30 (also known as WS30, DJ30 or Wall Street 30) – often also referred to as the Dow Jones Industrial Average, Dow Jones, Dow, or DJIA – is a stock market index tracking 30 of the most prominent industrial companies listed on stock exchanges within the United States. These companies are not necessarily the largest by overall company value, but they are well-established and influential.

Understanding the Price-Weighted Index

It is one of the oldest, and most widely followed, equity indices, particularly by financial media, although most money tracking the US equity market has since migrated to follow the broader US 500.

In contrast to most other major equity indices, the US 30 is price weighted, rather than market cap weighted, meaning that the higher an individual stock’s price, the greater the weight that it will have in the index.

Calculating the US 30

The DJIA's value is relatively simple to calculate. It's done by adding the stock prices of all 30 member companies and then dividing that sum by a factor called the "Dow Divisor." This divisor is adjusted whenever a stock split occurs within the index but currently sits around 0.1517.

Selection Process and Focus on Diverse Representation

There is no specific selection process by which stocks are selected to become members of the Dow, with the selection committee instead focusing on a range of criteria including “an eligible company's reputation, its history of sustained growth, its interest to investors, and its sector representation of the broader market”.

Past Performance Not a Future Guarantee

The historical performance of the US 30, which is no guarantee of future results, is shown below.

The weightings of US 30 constituents, at the time of writing, is as follows: