We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco Dow Jones Industrial Average Dividend ETF (DJD) a Strong ETF Right Now?
Read MoreHide Full Article
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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
DJD is managed by Invesco, and this fund has amassed over $295.85 million, which makes 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 3.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 17.90% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 10.22% of total assets, followed by 3m Co (MMM - Free Report) and Dow Inc (DOW - Free Report) .
The top 10 holdings account for about 60.95% of total assets under management.
Performance and Risk
So far this year, DJD has added about 3.53%, and is up roughly 14.61% in the last one year (as of 05/08/2024). During this past 52-week period, the fund has traded between $39.87 and $48.08.
The fund has a beta of 0.83 and standard deviation of 13.87% 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 $449.13 billion in assets, SPDR S&P 500 ETF has $513.43 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
DJD is managed by Invesco, and this fund has amassed over $295.85 million, which makes 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 3.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 17.90% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 10.22% of total assets, followed by 3m Co (MMM - Free Report) and Dow Inc (DOW - Free Report) .
The top 10 holdings account for about 60.95% of total assets under management.
Performance and Risk
So far this year, DJD has added about 3.53%, and is up roughly 14.61% in the last one year (as of 05/08/2024). During this past 52-week period, the fund has traded between $39.87 and $48.08.
The fund has a beta of 0.83 and standard deviation of 13.87% 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 $449.13 billion in assets, SPDR S&P 500 ETF has $513.43 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.