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Should Invesco Dow Jones Industrial Average Dividend ETF (DJD) Be on Your Investing Radar?

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The Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) was launched on 12/16/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $213.15 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies usually 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.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

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 0.07%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 3.55%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Healthcare sector--about 16.40% of the portfolio. Information Technology and Consumer Staples round out the top three.

Looking at individual holdings, Chevron Corp (CVX - Free Report) accounts for about 9.79% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and International Business Machines Corp (IBM - Free Report) .

The top 10 holdings account for about 57.14% of total assets under management.

Performance and Risk

DJD seeks to match the performance of the Dow Jones Industrial Average Yield Weighted index before fees and expenses. The Dow Jones Industrial Average Yield Weighted Index provides exposure to high-yielding equity securities in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months.

The ETF return is roughly 0.98% so far this year and was up about 11.21% in the last one year (as of 03/22/2022). In the past 52-week period, it has traded between $42.05 and $46.57.

The ETF has a beta of 0.84 and standard deviation of 22.50% for the trailing three-year period. With about 28 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Dow Jones Industrial Average Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DJD is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $328.40 billion in assets, SPDR S&P 500 ETF has $401.79 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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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