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After logging in back-to-back monthly gains, the Dow Jones Industrial Average entered into a new bull market, rallying 20% from its September lows. This indicates that the Santa rally may come early this year (read: 5 Sector ETFs That Beat The Market in November).
Investors seeking to participate in the Dow Jones’ rally can consider SPDR Dow Jones Industrial Average ETF (DIA - Free Report) , iShares Dow Jones U.S. ETF (IYY - Free Report) , Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) , ProShares Ultra Dow30 ETF (DDM - Free Report) and ProShares UltraPro Dow30 (UDOW - Free Report) .
Fed’s dovish comments and signs of cooling U.S. inflation raised hopes that the central bank will become less aggressive on interest-rates hikes. In the latest speech, Chairman Jerome Powell signaled that rate hikes could slow as soon as next month. This has renewed investors’ interest in riskier assets. Traders expect the Fed to increase rates by 50 bps in December, with the rates peaking in June 2023.
Additionally, the rounds of data underscore an improving economy, which can avoid a recession. The economy grew at an annualized rate of 2.9% in the third quarter, an upgrade from its initial estimate and the overall employment market remains strong. Consumer spending continued despite higher inflation.
The holiday season started with a huge bang despite concerns about inflation and higher prices that bolstered further optimism into the stock market to end November. Consumers spent a record $9.12 billion, up 2.3% year over year, on online shopping during Black Friday this year, according to Adobe. Cyber Monday online sales reached a record $11.3 billion in online shopping, up 5.8% year over year (read: 5 ETFs to Splurge on Cyber Monday Record Sales).
Holiday spending is expected to be healthy despite inflationary challenges, with retail sales likely to grow 6-8% from the 2021 level during November and December to $942.6-$960.4 billion, per the National Retail Federation. Holiday online sales are forecast to increase 10-12% to $262.8-$267.6 billion, up from $238.9 billion in 2021.
ETFs to Bet
SPDR Dow Jones Industrial Average ETF (DIA - Free Report)
SPDR Dow Jones Industrial Average ETF is one of the largest and most popular ETFs in the large-cap space, with AUM of $30.7 billion and an average daily volume of 4 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, with each having less than 10.5% share. Healthcare (21.4%), information technology (19.2%), financials (16.6%), industrials (14.5%), and consumer discretionary (13.5%) are the top five sectors.
SPDR Dow Jones Industrial Average ETF charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk.
iShares Dow Jones U.S. ETF tracks the Dow Jones U.S. Index, holding 1096 stocks in its basket, with none accounting for more than 5.8% of assets. Information technology takes the largest share at 25.3%, while healthcare, financials and consumer discretionary round off the next spots with double-digit exposure each.
iShares Dow Jones U.S. ETF has amassed $1.5 million in its asset base while trading in an average daily volume of 64,000 shares. It charges 20 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)
Invesco Dow Jones Industrial Average Dividend ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with none accounting for more than 7.3% of assets.
Invesco Dow Jones Industrial Average Dividend ETF has been able to manage assets worth $308.1 million, while trading in a volume of 58,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3.
Leveraged Play: A Short-Term Win
Investors willing to take an extra risk could go for leveraged ETFs. These funds create a leveraged (2X or 3X) long position in the underlying index through the use of swaps, options, future contracts and other financial instruments. While these funds provide outsized returns in a short span, they could lead to huge losses compared to traditional funds in fluctuating or seesaw markets.
ProShares Ultra Dow30 ETF provides twice (2X) the return of the Dow Jones Industrial Average. It has AUM of $395.9 million and trades in a good volume of around 514,000 shares on average. The product charges 95 bps in annual fees (see: all the Leveraged Equity ETFs here).
ProShares UltraPro Dow30 also tracks the Dow Jones Industrial Average but offers three times (3X) exposure to the index. It has amassed $708.2 million in its asset base and trades in a solid average daily volume of 4 million shares. The expense ratio comes in at 0.95%.
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Dow Jones Enters New Bulls Market: ETFs to Play
After logging in back-to-back monthly gains, the Dow Jones Industrial Average entered into a new bull market, rallying 20% from its September lows. This indicates that the Santa rally may come early this year (read: 5 Sector ETFs That Beat The Market in November).
Investors seeking to participate in the Dow Jones’ rally can consider SPDR Dow Jones Industrial Average ETF (DIA - Free Report) , iShares Dow Jones U.S. ETF (IYY - Free Report) , Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) , ProShares Ultra Dow30 ETF (DDM - Free Report) and ProShares UltraPro Dow30 (UDOW - Free Report) .
Fed’s dovish comments and signs of cooling U.S. inflation raised hopes that the central bank will become less aggressive on interest-rates hikes. In the latest speech, Chairman Jerome Powell signaled that rate hikes could slow as soon as next month. This has renewed investors’ interest in riskier assets. Traders expect the Fed to increase rates by 50 bps in December, with the rates peaking in June 2023.
Additionally, the rounds of data underscore an improving economy, which can avoid a recession. The economy grew at an annualized rate of 2.9% in the third quarter, an upgrade from its initial estimate and the overall employment market remains strong. Consumer spending continued despite higher inflation.
The holiday season started with a huge bang despite concerns about inflation and higher prices that bolstered further optimism into the stock market to end November. Consumers spent a record $9.12 billion, up 2.3% year over year, on online shopping during Black Friday this year, according to Adobe. Cyber Monday online sales reached a record $11.3 billion in online shopping, up 5.8% year over year (read: 5 ETFs to Splurge on Cyber Monday Record Sales).
Holiday spending is expected to be healthy despite inflationary challenges, with retail sales likely to grow 6-8% from the 2021 level during November and December to $942.6-$960.4 billion, per the National Retail Federation. Holiday online sales are forecast to increase 10-12% to $262.8-$267.6 billion, up from $238.9 billion in 2021.
ETFs to Bet
SPDR Dow Jones Industrial Average ETF (DIA - Free Report)
SPDR Dow Jones Industrial Average ETF is one of the largest and most popular ETFs in the large-cap space, with AUM of $30.7 billion and an average daily volume of 4 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, with each having less than 10.5% share. Healthcare (21.4%), information technology (19.2%), financials (16.6%), industrials (14.5%), and consumer discretionary (13.5%) are the top five sectors.
SPDR Dow Jones Industrial Average ETF charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk.
iShares Dow Jones U.S. ETF (IYY - Free Report)
iShares Dow Jones U.S. ETF tracks the Dow Jones U.S. Index, holding 1096 stocks in its basket, with none accounting for more than 5.8% of assets. Information technology takes the largest share at 25.3%, while healthcare, financials and consumer discretionary round off the next spots with double-digit exposure each.
iShares Dow Jones U.S. ETF has amassed $1.5 million in its asset base while trading in an average daily volume of 64,000 shares. It charges 20 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)
Invesco Dow Jones Industrial Average Dividend ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with none accounting for more than 7.3% of assets.
Invesco Dow Jones Industrial Average Dividend ETF has been able to manage assets worth $308.1 million, while trading in a volume of 58,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3.
Leveraged Play: A Short-Term Win
Investors willing to take an extra risk could go for leveraged ETFs. These funds create a leveraged (2X or 3X) long position in the underlying index through the use of swaps, options, future contracts and other financial instruments. While these funds provide outsized returns in a short span, they could lead to huge losses compared to traditional funds in fluctuating or seesaw markets.
ProShares Ultra Dow30 ETF (DDM - Free Report)
ProShares Ultra Dow30 ETF provides twice (2X) the return of the Dow Jones Industrial Average. It has AUM of $395.9 million and trades in a good volume of around 514,000 shares on average. The product charges 95 bps in annual fees (see: all the Leveraged Equity ETFs here).
ProShares UltraPro Dow30 (UDOW - Free Report)
ProShares UltraPro Dow30 also tracks the Dow Jones Industrial Average but offers three times (3X) exposure to the index. It has amassed $708.2 million in its asset base and trades in a solid average daily volume of 4 million shares. The expense ratio comes in at 0.95%.