Domini Social Index 400

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Domini Social Index 400

An index tracking 400 publicly-traded companies in the United States known for socially responsible investing. The index excludes companies that produce alcohol, tobacco, weapons, nuclear power, and other controversial products. The Domini 400 includes around 250 companies on the S&P 500 and other companies known for sustainable business practices. It was launched in 1990 and is weighted for market capitalization. See also: Ethical investing, Green fund, Islamic finance.
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Domini Social Index 400.

The Domini Social Index 400 is a market capitalization weighted index that tracks the performance of companies that meet a wide range of social and environmental standards.

For instance, the index screens out companies that manufacture or promote alcohol, tobacco, gambling, weapons, and nuclear power. It includes others that have outstanding records of social responsibility.

About half the stocks included in the Standard & Poor's 500 Index (S&P 500), on which the Domini Index is modeled, make the cut, including giants like Microsoft and Coca-Cola. The other stocks are selected based on the industries they represent and their reputations for socially conscious business practices.

The index is considered a benchmark for measuring the effect that selecting socially responsible stocks has on a financial portfolio's performance. This practice is also called social screening.

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References in periodicals archive ?
Because the authors do not have access to the proprietary Domini 400 index information, the primary index on SRI, Yahoo Finance was used to obtain returns of an exchanged trade fund, DSI, which mimics the performance of the Domini 400.
Figure 2 plots the time series of mean monthly returns for the CRSP market index, the Domini 400 index, the "social portfolio" and the "control portfolio".
The Domini 400 index, which represents the 400 largest companies that meet the social performance standards of KLD Research and Analytics, outperformed the CRSP market index over our study period.
He notes that it helped create organizations such as KLD Research & Analytics, the social research firm in Boston that developed the Domini 400 Index, and the Investor Responsibility Research Center (IRRC) as information providers.
The Domini 400 index of socially responsible companies has outpaced the S&P 500 over the past 10 years, gaining 13.82 percent annually versus the S&P's 12.78 percent.
Things began looking up in the second quarter of 2001, however, with the Domini 400 Index growing by 5.17 percent compared to the S&P's 5.85 percent.