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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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, DJD has amassed assets over $292.84 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. DJD, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for DJD are 0.07%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.44%.
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.
For DJD, it has heaviest allocation in the Financials sector --about 16.70% of the portfolio --while Consumer Staples and Information Technology round out the top three.
When you look at individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 10.68% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and 3m Co (MMM - Free Report) .
The top 10 holdings account for about 59.96% of total assets under management.
Performance and Risk
The ETF has added about 1.65% and was up about 11.54% so far this year and in the past one year (as of 03/06/2024), respectively. DJD has traded between $39.87 and $47.05 during this last 52-week period.
The ETF has a beta of 0.83 and standard deviation of 14.01% 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 $444.90 billion in assets, SPDR S&P 500 ETF has $501.36 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, DJD has amassed assets over $292.84 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. DJD, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for DJD are 0.07%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.44%.
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.
For DJD, it has heaviest allocation in the Financials sector --about 16.70% of the portfolio --while Consumer Staples and Information Technology round out the top three.
When you look at individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 10.68% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and 3m Co (MMM - Free Report) .
The top 10 holdings account for about 59.96% of total assets under management.
Performance and Risk
The ETF has added about 1.65% and was up about 11.54% so far this year and in the past one year (as of 03/06/2024), respectively. DJD has traded between $39.87 and $47.05 during this last 52-week period.
The ETF has a beta of 0.83 and standard deviation of 14.01% 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 $444.90 billion in assets, SPDR S&P 500 ETF has $501.36 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.