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Should SPDR Dow Jones Industrial Average ETF (DIA) Be on Your Investing Radar?
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Launched on 01/13/1998, the SPDR Dow Jones Industrial Average ETF (DIA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $28.36 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.16%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.74%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 22.50% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Unitedhealth Group Incorporated (UNH - Free Report) accounts for about 8.32% of total assets, followed by Goldman Sachs Group Inc. (GS - Free Report) and Home Depot Inc. (HD - Free Report) .
The top 10 holdings account for about 54.56% of total assets under management.
Performance and Risk
DIA seeks to match the performance of the Dow Jones Industrial Average before fees and expenses. The Dow Jones Industrial Average is composed of thirty blue-chip U.S. stocks.
The ETF has lost about -8.68% so far this year and it's up approximately 7.40% in the last one year (as of 03/02/2022). In the past 52-week period, it has traded between $309.58 and $367.87.
The ETF has a beta of 0.98 and standard deviation of 23.42% for the trailing three-year period, making it a medium risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR Dow Jones Industrial Average ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DIA is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $55.68 billion in assets, Vanguard Value ETF has $91.48 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should SPDR Dow Jones Industrial Average ETF (DIA) Be on Your Investing Radar?
Launched on 01/13/1998, the SPDR Dow Jones Industrial Average ETF (DIA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $28.36 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.16%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.74%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 22.50% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Unitedhealth Group Incorporated (UNH - Free Report) accounts for about 8.32% of total assets, followed by Goldman Sachs Group Inc. (GS - Free Report) and Home Depot Inc. (HD - Free Report) .
The top 10 holdings account for about 54.56% of total assets under management.
Performance and Risk
DIA seeks to match the performance of the Dow Jones Industrial Average before fees and expenses. The Dow Jones Industrial Average is composed of thirty blue-chip U.S. stocks.
The ETF has lost about -8.68% so far this year and it's up approximately 7.40% in the last one year (as of 03/02/2022). In the past 52-week period, it has traded between $309.58 and $367.87.
The ETF has a beta of 0.98 and standard deviation of 23.42% for the trailing three-year period, making it a medium risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR Dow Jones Industrial Average ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DIA is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $55.68 billion in assets, Vanguard Value ETF has $91.48 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.