The Dow Jones Industrial Average (DJIA), created by Charles Dow in 1896, is one of the oldest U.S. market indexes. It is commonly referred to as "the Dow" and stands alongside the S&P 500 and Nasdaq Composite as one of the three main indexes tracking U.S. equities. But unlike those other two, the Dow is relatively small in size, comprised of just 30 blue-chip stocks, and is price weighted as opposed to cap weighted. Those differences, however, do not keep the Dow from being used by many investors as a proxy for the health of the broader U.S. economy.
The Dow has recently faced intense volatility due to fears surrounding the coronavirus pandemic and other global geopolitical developments. Investors seeking to capitalize on the Dow without buying individual stocks may consider investing in an exchange-traded fund (ETF). These funds hold baskets of securities in order to provide efficiency and portfolio diversity as a means of reducing risk.
The SPDR Dow Jones Industrial Average ETF (DIA) is currently the only non-leveraged ETF that tracks the Dow. Because of the recent market and economic turbulence, the DIA is down over the past year with a 1-year trailing return of -6.5%. All figures below are as of May 17, 2020.
- Performance over 1-Year: -6.5%
- Expense Ratio: 0.16%
- Annual Dividend Yield: 2.56%
- 3-Month Average Daily Volume: 7,960,128
- Assets Under Management: $18,598.0 million
- Inception Date: January 14, 1998
- Issuer: State Street SPDR
DIA is the ETF for investors seeking to replicate the performance of the Dow, which tracks the stocks of some of the largest companies in the U.S. economy. The fund may not be as diversified as most ETFs because it holds just 30 stocks, but these stocks belong to companies with strong fundamentals and finances. These factors give them greater capability than most companies to weather extremely adverse economic and market events. While these stocks are relatively safe, their fast-growth days are largely behind them and many investors like them for reliable dividend payouts. DIA thus remains a popular choice for investors looking for relatively safe exposure to large-cap U.S. equities. Below, we'll look at the top 10 holdings for DIA.
|Top DIA Holdings|
|Company Name (Ticker)||Percentage of DIA Assets||Company Description|
|Apple Inc. (AAPL)||8.9%||Consumer electronics|
|UnitedHealth Group Inc. (UNH)||8.4%||Health insurance|
|Home Depot Inc. (HD)||6.9%||Home improvement retailer|
|Visa Inc. (V)||5.3%||Credit card services|
|Microsoft Corp. (MSFT)||5.3%||Software and gaming console maker|
|McDonald's Corp. (MCD)||5.0%||Fast food|
|Goldman Sachs Group Inc. (GS)||5.0%||Investment bank|
|Johnson & Johnson (JNJ)||4.4%||Consumer goods, medical, pharmaceuticals|
|3M Co. (MMM)||4.0%||Consumer goods and industrial conglomerate|
|Walmart Inc. (WMT)||3.7%||Discount department store and grocery chain|
ETFdb.com "Dow Jones Industrial Average (INDEXDJX DJI) – ETF Tracker," Accessed May 17, 2020.
ETFdb.com. "DIA SPDR Dow Jones Industrial Average ETF Performance," Accessed May 17, 2020.
ETFdb.com. "DIA SPDR Dow Jones Industrial Average ETF," Accessed May 17, 2020.