Launched on 12/16/2015, the Invesco Dow Jones Industrial Average Dividend ETF (
DJD Quick Quote DJD - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $224.91 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 3.59%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 18.30% of the portfolio. Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, International Business Machines Corp (
IBM Quick Quote IBM - Free Report) accounts for about 8.57% of total assets, followed by Dow Inc ( DOW Quick Quote DOW - Free Report) and Merck & Co Inc ( MRK Quick Quote MRK - Free Report) .
The top 10 holdings account for about 52.43% 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 has lost about -14.48% so far this year and is down about -9.47% in the last one year (as of 09/28/2022). In the past 52-week period, it has traded between $38.06 and $47.60.
The ETF has a beta of 0.79 and standard deviation of 23.15% for the trailing three-year period. With about 29 holdings, it has more concentrated exposure than peers.
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 Quick Quote IVV - Free Report) and the SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $272.40 billion in assets, SPDR S&P 500 ETF has $327.25 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%. 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.