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Is Invesco Dow Jones Industrial Average Dividend ETF (DJD) a Strong ETF Right Now?
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The Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) made its debut on 12/16/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. DJD has been able to amass assets over $278.08 million, making 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
The fund has a 12-month trailing dividend yield of 3.27%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
DJD's heaviest allocation is in the Information Technology sector, which is about 18% of the portfolio. Its Consumer Staples and Financials round out the top three.
When you look at individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 7.23% of the fund's total assets, followed by International Business Machines Corp (IBM - Free Report) and Verizon Communications Inc (VZ - Free Report) .
Its top 10 holdings account for approximately 56.02% of DJD's total assets under management.
Performance and Risk
The ETF has lost about -0.22% so far this year and is down about -6.14% in the last one year (as of 04/24/2023). In the past 52-week period, it has traded between $37.49 and $46.53.
The fund has a beta of 0.82 and standard deviation of 16.97% 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 $308.54 billion in assets, SPDR S&P 500 ETF has $377.20 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?
The Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) made its debut on 12/16/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. DJD has been able to amass assets over $278.08 million, making 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
The fund has a 12-month trailing dividend yield of 3.27%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
DJD's heaviest allocation is in the Information Technology sector, which is about 18% of the portfolio. Its Consumer Staples and Financials round out the top three.
When you look at individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 7.23% of the fund's total assets, followed by International Business Machines Corp (IBM - Free Report) and Verizon Communications Inc (VZ - Free Report) .
Its top 10 holdings account for approximately 56.02% of DJD's total assets under management.
Performance and Risk
The ETF has lost about -0.22% so far this year and is down about -6.14% in the last one year (as of 04/24/2023). In the past 52-week period, it has traded between $37.49 and $46.53.
The fund has a beta of 0.82 and standard deviation of 16.97% 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 $308.54 billion in assets, SPDR S&P 500 ETF has $377.20 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.