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Is Invesco Dow Jones Industrial Average Dividend ETF (DJD) a Strong ETF Right Now?
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Making its debut on 12/16/2015, smart beta exchange traded fund Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
DJD is managed by Invesco, and this fund has amassed over $200.10 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Dow Jones Industrial Average Yield Weighted index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.07% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.78%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector - about 17.30% of the portfolio. Consumer Staples and Information Technology round out the top three.
Looking at individual holdings, Chevron Corp (CVX - Free Report) accounts for about 13.29% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and Dow Inc (DOW - Free Report) .
DJD's top 10 holdings account for about 60.38% of its total assets under management.
Performance and Risk
So far this year, DJD return is roughly 2.14%, and was up about 9.75% in the last one year (as of 04/14/2022). During this past 52-week period, the fund has traded between $42.33 and $46.74.
The ETF has a beta of 0.84 and standard deviation of 22.49% 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 is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $328.02 billion in assets, SPDR S&P 500 ETF has $406.39 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
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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Is Invesco Dow Jones Industrial Average Dividend ETF (DJD) a Strong ETF Right Now?
Making its debut on 12/16/2015, smart beta exchange traded fund Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
DJD is managed by Invesco, and this fund has amassed over $200.10 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Dow Jones Industrial Average Yield Weighted index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.07% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.78%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector - about 17.30% of the portfolio. Consumer Staples and Information Technology round out the top three.
Looking at individual holdings, Chevron Corp (CVX - Free Report) accounts for about 13.29% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and Dow Inc (DOW - Free Report) .
DJD's top 10 holdings account for about 60.38% of its total assets under management.
Performance and Risk
So far this year, DJD return is roughly 2.14%, and was up about 9.75% in the last one year (as of 04/14/2022). During this past 52-week period, the fund has traded between $42.33 and $46.74.
The ETF has a beta of 0.84 and standard deviation of 22.49% 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 is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $328.02 billion in assets, SPDR S&P 500 ETF has $406.39 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
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.