Launched on 01/13/1998, the SPDR Dow Jones Industrial Average ETF (
DIA Quick Quote 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 $27.06 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 usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.98%.
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 Healthcare sector--about 21.90% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Unitedhealth Group Incorporated (
UNH Quick Quote UNH - Free Report) accounts for about 9.49% of total assets, followed by Goldman Sachs Group Inc. ( GS Quick Quote GS - Free Report) and Home Depot Inc. ( HD Quick Quote HD - Free Report) .
The top 10 holdings account for about 52.74% 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 -14.14% so far this year and is down about -8.89% in the last one year (as of 07/05/2022). In the past 52-week period, it has traded between $298.72 and $367.87.
The ETF has a beta of 0.94 and standard deviation of 24.30% 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.
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 a great 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 Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $51.64 billion in assets, Vanguard Value ETF has $94.48 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. 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.