Dogs of the Dow Investment Strategy: Application to the Euro Stoxx 50

Authors

  • Reda Farran Kuwait University
  • Mohammed Shahruz Kuwait University

DOI:

https://doi.org/10.34120/ajas.v20i1.843

Keywords:

Dogs, Dow, Investment, Strategy, Portfolio, Dividend, Stoxx

Abstract

This paper evaluates the performance of the Dogs of the Dow investment strategy when applied to the Euro Stoxx 50 index. We back test a hypothetical portfolio ("Dogs Portfolio") that applies the strategy to the index from 1991 to 2010. The Dogs Portfolio outperforms the Euro Stoxx 50 in 13 out of the 20 years. On an annualized basis. the Dogs Portfolio nets a rate of return greater than the index's by 6.41%. The risk-adjusted performance of the Dogs Portfolio, measured by the Sharpe index, is greater than the Euro Stoxx 50's by approximately 65%.

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Author Biographies

Reda Farran, Kuwait University

graduated with honors in 2011 from the College of Business Administration Kuwait University with a BBA in Finance and Financial Institutions. He worked as an Equity Analyst at KMEFIC and is currently pursuing an MSc in Finance at Imperial College London. His major fields of interest are portfolio management, mutual funds, private equity, and investment banking.

Mohammed Shahruz, Kuwait University

graduated with honors in 2012 from the College of Business Administration Kuwait University with a BBA in Finance and Financial Institutions. He is currently pursuing his MBA in Finance and Energy at the University of Oklahoma in the US. His major fields of interest are hedge funds, portfolio management, personal finance, and corporate banking.

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Published

2013

How to Cite

Farran, R., & Shahruz, M. (2013). Dogs of the Dow Investment Strategy: Application to the Euro Stoxx 50. Arab Journal of Administrative Sciences, 20(1), 151–165. https://doi.org/10.34120/ajas.v20i1.843

Issue

Vol. 20 No. 1 (2013)

Section

Finance