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 the Nasdaq Composite as one of the three main indexes tracking U.S. equities, despite being both smaller in size—it’s composed of 30 blue-chip stocks—and price-weighted as opposed to capitalization (cap)-weighted. Those differences, however, do not keep investors from using the Dow as a proxy for the health of the broader U.S. economy.
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 to provide efficiency and portfolio diversity, a key ingredient for reducing risk.
Key Takeaways
- The Dow Jones Industrial Average (DJIA or the Dow) is a price-weighted index composed of 30 blue-chip stocks.
- The Dow has underperformed the S&P 500 over the past year.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) is the best (and only) exchange-traded fund tracking the Dow.
- DIA’s top holdings are UnitedHealth Group Inc., Goldman Sachs Group Inc., and Home Depot Inc.
The Dow posted a total one-year trailing return of 15.1%, below the total return of 17.1% delivered by the S&P 500, as of Feb. 8, 2022. Though there is another fund based on the Dow—the ProShares Ultra Dow 30 (DDM)—it is a leveraged ETF that seeks to deliver daily investment results that are double the daily performance of the Dow. Currently, the SPDR Dow Jones Industrial Average ETF Trust (DIA) is the only non-leveraged, non-inverse, U.S.-traded ETF that tracks the Dow. We examine this ETF below in closer detail. All figures below are as of Feb. 8, 2022.
SPDR Dow Jones Industrial Average ETF Trust (DIA)
- Performance Over One-Year: 14.9%
- Expense Ratio: 0.16%
- Annual Dividend Yield: 1.56%
- Three-Month Average Daily Volume: 6,927,283
- Assets Under Management: $29.6 billion
- Inception Date: Jan. 14, 1998
- Issuer: State Street
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. Though these stocks are relatively safe, their fast-growth days are largely behind them. Many investors choose Dow companies for their defensive qualities and reliable dividend payouts, rather than explosive capital appreciation potential, with DIA remaining 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 |
UnitedHealth Group Inc. (UNH) | 9.2% | Health insurance |
Goldman Sachs Group Inc. (GS) | 6.9% | Investment bank |
Home Depot Inc. (HD) | 6.7% | Home improvement retailer |
Microsoft Corp. (MSFT) | 5.7% | Software, cloud services, and devices such as gaming consoles |
McDonald’s Corp. (MCD) | 4.8% | Fast-food restaurant chain |
Amgen Inc. (AMGN) | 4.5% | Biotechnology company |
Visa Inc. (V) (Class A shares) | 4.2% | Credit card services |
Salesforce.com Inc. (CRM) | 4.0% | Cloud-based enterprise software |
Boeing Co. (BA) | 4.0% | Airplane manufacturer |
Caterpillar Inc. (CAT) | 3.7% | Construction equipment manufacturer |
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
-
Best ETFs for Q2 2022
-
Best S&P 500 ETFs for Q2 2022
-
2 Nasdaq ETFs for Q2 2022
-
The Best (and Only) Dow Jones Industrial Average ETF for Q2 2022
-
Best Dividend ETFs for Q2 2022
-
Best Growth ETFs for Q2 2022
-
Best Value ETFs for Q2 2022
-
Best Small-Cap ETFs for Q2 2022
-
Best Tech ETFs for Q2 2022
-
Best AI ETFs for Q2 2022
-
Best Blockchain ETFs for Q2 2022
-
Best Cybersecurity ETFs for Q2 2022
-
Best FANG Stock ETFs for Q2 2022
-
3 Video Game ETFs for Q1 2022
-
Best Semiconductor ETFs for Q4 2020
-
Best Energy ETFs for Q1 2022
-
Best Oil and Gas ETFs for Q2 2022
-
Best Alternative Energy ETFs for Q4 2020
-
Best Healthcare ETFs for Q2 2022
-
Best Biotech ETFs for Q2 2022
-
Best Pharmaceutical ETFs for Q2 2022
-
Best Transportation ETFs for Q3 2022
-
The Best (and Only) Airline ETF for Q2 2022
-
The Best (and Only) Auto ETF for Q2 2022
-
Best Consumer Staples ETFs for Q2 2022
-
Best Telecom ETFs for Q2 2022
-
Best Bank ETFs for Q2 2022
-
Best Homebuilder ETFs for Q3 2022
-
Best Industrial ETFs for Q2 2022
-
Best Impact Investing ETFs for Q2 2022
-
Best Infrastructure ETFs for Q3 2022
-
Best Marijuana ETFs for Q2 2022
-
Best REIT ETFs for Q2 2022
-
Best Water ETFs for Q2 2022
-
Best Preferred Stock ETFs for Q2 2022
-
Best Gold Miner ETFs for Q2 2022
-
Best China ETFs for Q2 2022
-
2 Hong Kong ETFs for Q3 2022
-
Best India ETFs for Q2 2022
-
Best Japan ETFs for Q3 2022
-
Best Europe ETFs for Q2 2022
-
3 U.K. ETFs for Q3 2022
-
3 South Korea ETFs for Q2 2022
-
The Best (and Only) Vietnam ETF for Q2 2022
-
Best Leveraged S&P 500 ETFs for Q2 2022
-
Most Traded Leveraged ETFs for Q2 2022
-
3 Inverse REIT ETFs for Q2 2022
-
The Best Inverse ETFs of the 2020 Bear Market
-
3 Inverse ETFs to Short Small Cap Stocks