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Should SPDR Dow Jones Industrial Average ETF (DIA) Be on Your Investing Radar?
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The SPDR Dow Jones Industrial Average ETF (DIA - Free Report) was launched on 01/13/1998, and is a passively managed exchange traded fund designed to offer 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 $29.49 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
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.
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 1.91%.
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 Financials sector--about 20.30% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Unitedhealth Group Inc (UNH - Free Report) accounts for about 10.55% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Goldman Sachs Group Inc (GS - Free Report) .
The top 10 holdings account for about 56.66% 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 gained about 7.90% so far this year and was up about 6.39% in the last one year (as of 11/21/2023). In the past 52-week period, it has traded between $318.50 and $356.20.
The ETF has a beta of 0.93 and standard deviation of 15.06% 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.
Alternatives
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 an outstanding 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 - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $50.11 billion in assets, Vanguard Value ETF has $99.66 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.
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Should SPDR Dow Jones Industrial Average ETF (DIA) Be on Your Investing Radar?
The SPDR Dow Jones Industrial Average ETF (DIA - Free Report) was launched on 01/13/1998, and is a passively managed exchange traded fund designed to offer 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 $29.49 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
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.
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 1.91%.
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 Financials sector--about 20.30% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Unitedhealth Group Inc (UNH - Free Report) accounts for about 10.55% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Goldman Sachs Group Inc (GS - Free Report) .
The top 10 holdings account for about 56.66% 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 gained about 7.90% so far this year and was up about 6.39% in the last one year (as of 11/21/2023). In the past 52-week period, it has traded between $318.50 and $356.20.
The ETF has a beta of 0.93 and standard deviation of 15.06% 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.
Alternatives
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 an outstanding 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 - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $50.11 billion in assets, Vanguard Value ETF has $99.66 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.