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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) was launched on 12/16/2015, and is a smart beta exchange traded fund designed to offer 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.
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 $259.82 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, DJD 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
It has a 12-month trailing dividend yield of 3.57%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
DJD's heaviest allocation is in the Information Technology sector, which is about 17.10% of the portfolio. Its Consumer Staples and Healthcare round out the top three.
Taking into account individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 8.95% of the fund's total assets, followed by Walgreens Boots Alliance Inc (WBA - Free Report) and 3m Co (MMM - Free Report) .
The top 10 holdings account for about 58.08% of total assets under management.
Performance and Risk
The ETF has lost about -1.72% so far this year and is up about 3.53% in the last one year (as of 06/26/2023). In the past 52-week period, it has traded between $37.49 and $45.68.
DJD has a beta of 0.82 and standard deviation of 15.74% for the trailing three-year period. With about 29 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 $327.18 billion in assets, SPDR S&P 500 ETF has $404.94 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) was launched on 12/16/2015, and is a smart beta exchange traded fund designed to offer 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.
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 $259.82 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, DJD 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
It has a 12-month trailing dividend yield of 3.57%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
DJD's heaviest allocation is in the Information Technology sector, which is about 17.10% of the portfolio. Its Consumer Staples and Healthcare round out the top three.
Taking into account individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 8.95% of the fund's total assets, followed by Walgreens Boots Alliance Inc (WBA - Free Report) and 3m Co (MMM - Free Report) .
The top 10 holdings account for about 58.08% of total assets under management.
Performance and Risk
The ETF has lost about -1.72% so far this year and is up about 3.53% in the last one year (as of 06/26/2023). In the past 52-week period, it has traded between $37.49 and $45.68.
DJD has a beta of 0.82 and standard deviation of 15.74% for the trailing three-year period. With about 29 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 $327.18 billion in assets, SPDR S&P 500 ETF has $404.94 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.