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ETFs to Tap Dow Jones' Longest Winning Streak Since 2017
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After lagging the S&P 500 and Nasdaq for most of the year, the Dow Jones Industrial Average is finally catching up. The blue-chip gauge climbed for nine consecutive sessions, marking the longest winning streak since Sep 20, 2017.
Investors seeking to tap the rebound in the Dow Jones trend 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) .
The comeback is mainly driven by rotation to value stocks. Value stocks and other previously lagging sectors of the market are rebounding over the past two weeks as investors are looking for undervalued or underperforming stocks. The Dow Jones is currently valued at a P/E ratio of 18.64 times forward 12 months compared with the S&P 500’s 20.37 and Nasdaq 100’s 29.32, according to the data from Barron’s.
Additionally, earnings optimism is instilling confidence in the blue-chip index. The rounds of solid corporate earnings from Dow constituents like Johnson & Johnson (JNJ - Free Report) , Travelers (TRV - Free Report) , UnitedHealth (UNH - Free Report) , Morgan Stanley (MS - Free Report) and Bank of America (BAC - Free Report) are driving the blue-chip index higher.
Further, improving economic indicators, such as strong job numbers, rising consumer spending, and robust manufacturing activity, helped Dow Jones to move higher. Being cyclical in nature, the blue-chip index outperforms when economic growth improves.
U.S. consumer prices in June registered their smallest annual increase in over two years, reviving hopes that the Fed was nearing the end of its interest rate increases. The Consumer Price Index rose 3% year over year and 0.2% over the last month. Easing inflation indicates that the economy is stabilizing and interest rates may decline. Consumer sentiment, as indicated by the University of Michigan preliminary index, jumped to an almost two-year high in July. Meanwhile, homebuilder sentiment also climbed for the seventh straight month and is hovering at the highest level since June 2022 (read: 5 ETFs to Ride on Soaring 2-Year High Consumer Sentiment).
ETFs to Tap
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 3 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, each having less than 9.5% share. Financials (20.4%), information technology (18.9%), healthcare (18.8%), industrials (14.7%) and consumer discretionary (13.6%) 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 outlook.
iShares Dow Jones U.S. ETF tracks the Dow Jones U.S. Index, holding 1097 stocks in its basket, with none accounting for more than 6.8% of the assets. Information technology takes the largest share at 27.6%, while financials, healthcare and consumer discretionary round off the next spots with double-digit exposure each.
iShares Dow Jones U.S. ETF has amassed $1.7 billion in its asset base while trading in an average daily volume of 43,000 shares. It charges 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) 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 29 stocks in its basket, with none accounting for more than 8% of the assets (read: IBM Beats on Q2 Earnings: ETFs in Focus).
Invesco Dow Jones Industrial Average Dividend ETF has been able to manage assets worth $272.2 million while trading in a volume of 45,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold).
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, these 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 $361.4 million and trades in a good volume of around 286,000 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 $669.7 million in its asset base and trades in a solid average daily volume of 2.4 million shares. The expense ratio comes in at 0.95%.
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ETFs to Tap Dow Jones' Longest Winning Streak Since 2017
After lagging the S&P 500 and Nasdaq for most of the year, the Dow Jones Industrial Average is finally catching up. The blue-chip gauge climbed for nine consecutive sessions, marking the longest winning streak since Sep 20, 2017.
Investors seeking to tap the rebound in the Dow Jones trend 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) .
The comeback is mainly driven by rotation to value stocks. Value stocks and other previously lagging sectors of the market are rebounding over the past two weeks as investors are looking for undervalued or underperforming stocks. The Dow Jones is currently valued at a P/E ratio of 18.64 times forward 12 months compared with the S&P 500’s 20.37 and Nasdaq 100’s 29.32, according to the data from Barron’s.
Additionally, earnings optimism is instilling confidence in the blue-chip index. The rounds of solid corporate earnings from Dow constituents like Johnson & Johnson (JNJ - Free Report) , Travelers (TRV - Free Report) , UnitedHealth (UNH - Free Report) , Morgan Stanley (MS - Free Report) and Bank of America (BAC - Free Report) are driving the blue-chip index higher.
Further, improving economic indicators, such as strong job numbers, rising consumer spending, and robust manufacturing activity, helped Dow Jones to move higher. Being cyclical in nature, the blue-chip index outperforms when economic growth improves.
U.S. consumer prices in June registered their smallest annual increase in over two years, reviving hopes that the Fed was nearing the end of its interest rate increases. The Consumer Price Index rose 3% year over year and 0.2% over the last month. Easing inflation indicates that the economy is stabilizing and interest rates may decline. Consumer sentiment, as indicated by the University of Michigan preliminary index, jumped to an almost two-year high in July. Meanwhile, homebuilder sentiment also climbed for the seventh straight month and is hovering at the highest level since June 2022 (read: 5 ETFs to Ride on Soaring 2-Year High Consumer Sentiment).
ETFs to Tap
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 3 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, each having less than 9.5% share. Financials (20.4%), information technology (18.9%), healthcare (18.8%), industrials (14.7%) and consumer discretionary (13.6%) 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 outlook.
iShares Dow Jones U.S. ETF (IYY - Free Report)
iShares Dow Jones U.S. ETF tracks the Dow Jones U.S. Index, holding 1097 stocks in its basket, with none accounting for more than 6.8% of the assets. Information technology takes the largest share at 27.6%, while financials, healthcare and consumer discretionary round off the next spots with double-digit exposure each.
iShares Dow Jones U.S. ETF has amassed $1.7 billion in its asset base while trading in an average daily volume of 43,000 shares. It charges 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) 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 29 stocks in its basket, with none accounting for more than 8% of the assets (read: IBM Beats on Q2 Earnings: ETFs in Focus).
Invesco Dow Jones Industrial Average Dividend ETF has been able to manage assets worth $272.2 million while trading in a volume of 45,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold).
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, these 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 $361.4 million and trades in a good volume of around 286,000 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 $669.7 million in its asset base and trades in a solid average daily volume of 2.4 million shares. The expense ratio comes in at 0.95%.