How to invest in the Dow Jones

The Dow Jones is a stock index in the US and is home to some major well known companies like Apple, Coca-Cola and McDonald's. There are only 30 companies on this index so you could choose to invest in all 30 or you could invest in an index fund that does it for you. Find out how as well as more about how the Dow Jones works.

Can I invest in the Dow Jones in Australia?

Yes, there are a few ways to trade or invest in the Dow Jones from Australia. You can't buy shares directly in the Dow Jones because it's not a stock, but you can invest in an exchange-traded fund (ETF) or index fund that tracks the performance of the 30 stocks in the Dow Jones Industrial Average index.

You can also buy shares in the individual companies listed on the Dow Jones index, but this can be an expensive and time-consuming way to invest. To buy shares in US-listed stocks from Australia, you'll need to open an account with a US stock trading platform.

How to trade the Dow Jones index

It's possible to trade the Dow Jones using contracts for difference (CFDs). When you trade CFD indices, you're betting on the future price movements of the index. This means you have the potential to earn a profit regardless of whether the index is rising or falling. This is sometimes called "futures" trading.

As CFD traders typically use leverage, both profits and losses are amplified. For this reason, CFDs are considered to be high-risk and only for experienced investors. You can find out more about this in our comprehensive guide to CFD trading.

How to invest in a Dow Jones fund

1. Choose an index fund or ETF that tracks the Dow. Some index funds track the performance of all 30 Dow stocks, whereas others only track a certain number of stocks or are weighted more towards specific stocks. You should select the fund that best suits your investment goals.
2. Open a share-trading account. Once you've selected the fund you'd like to buy, you'll need to open a trading account with a broker or platform that offers it. Different brokers have different fee structures, so it's worth researching which platform best suits your needs before investing. You can compare trading platforms below.
3. Deposit funds. Once you've set up an account, you'll need to deposit funds. Depending on which broker you use, you may need to pay a forex fee when you deposit money.
4. Buy the index fund. Once your account is set up and funded, you can buy the Dow Jones index fund. You generally pay a small annual fee in order to invest in an index fund or ETF.

How does the Dow Jones work?

The Dow Jones Industrial Average (DJIA), also known as the Dow, is a stock market index that tracks the stock performance of 30 of the largest companies on US stock exchanges. It's not weighted by market capitalisation and does not use a weighted arithmetic mean. It is maintained by S&P Dow Jones Indices and is the second-oldest US market index.

Should I invest in the Dow Jones?

The Dow is an index of 30 of the largest and most successful companies on US stock exchanges. Between 2009 and 2019, the Dow gained over 21,000 points, an increase of around 260%. Historically it has been a sensible investment option, however in recent years it has been outperformed by the tech-heavy NASDAQ index.

Dow Jones ETFs

To date, there are no Dow Jones ETFs listed in Australia, however there are a number of ETFs that track the US market. Below are just a few:

• BetaShares S&P 500 Yield Maximiser Fund (Managed Fund)
• BetaShares NASDAQ 100 ETF - Currency Hedged
• iShares S&P 500 ETF
• BetaShares NASDAQ 100 ETF

Investing in Dow Jones stocks

The alternative way to invest in the Dow Jones is to buy stocks in the listed companies directly. You could choose to buy one share in each of the 30 companies in the Dow or select a few stocks to buy.

However, while this method gives you direct exposure to the companies in the Dow Jones, it's likely to be an expensive way to invest. Many of the stocks in the Dow are worth hundreds of US dollars, so if you wanted to buy at least one stock in each company, you'd be looking at investing significant money.

Depending on which broker or trading platform you use, you may also be charged for each individual stock you buy, and these trading fees can often wipe out any potential profit you make. In comparison, you only pay a small annual fee when you buy an ETF, but your investment will still be tied to the performance of the Dow.

You can also trade the Dow Jones via derivatives such as futures contracts, which let you predict how the index will perform over a certain period.

Dow Jones (DJIA) live price

What companies are in the Dow Jones (DJIA)?

Company	Exchange	Stock code	Industry
3M	NYSE	NYSE: MMM	Conglomerate
American Express	NYSE	NYSE: AXP	Financial services
Apple Inc.	NASDAQ	AAPL	Information technology
Boeing	NYSE	NYSE: BA	Aerospace and arms
Caterpillar Inc.	NYSE	NYSE: CAT	Construction/Mining
Chevron Corporation	NYSE	NYSE: CVX	Petroleum industry
Cisco Systems	NASDAQ	CSCO	Information technology
The Coca-Cola Company	NYSE	NYSE: KO	Food industry
Dow Inc.	NYSE	NYSE: DOW	Chemical industry
ExxonMobil	NYSE	NYSE: XOM	Petroleum industry
Goldman Sachs	NYSE	NYSE: GS	Financial services
The Home Depot	NYSE	NYSE: HD	Retailing
IBM	NYSE	NYSE: IBM	Information technology
Intel	NASDAQ	INTC	Information technology
Johnson & Johnson	NYSE	NYSE: JNJ	Pharmaceuticals
JPMorgan Chase	NYSE	NYSE: JPM	Financial services
McDonald's	NYSE	NYSE: MCD	Food industry
Merck & Co.	NYSE	NYSE: MRK	Pharmaceuticals
Microsoft	NASDAQ	MSFT	Information technology
Nike	NYSE	NYSE: NKE	Apparel
Pfizer	NYSE	NYSE: PFE	Pharmaceuticals
Procter & Gamble	NYSE	NYSE: PG	Consumer
The Travelers Companies	NYSE	NYSE: TRV	Financial services
UnitedHealth Group	NYSE	NYSE: UNH	Managed health care
United Technologies	NYSE	NYSE: UTX	Conglomerate
Verizon	NYSE	NYSE: VZ	Telecommunication
Visa Inc.	NYSE	NYSE: V	Financial services
Walmart	NYSE	NYSE: WMT	Retailing
Walgreens Boots Alliance	NASDAQ	WBA	Retailing
The Walt Disney Company	NYSE	NYSE: DIS	Broadcasting/entertainment

Compare platforms for trading the Dow Jones

• Share trading accounts
• CFD trading accounts