Bourses in the United States hit yet another high note, buoyed by optimism over easy money policies. This is especially true as Fed Chair Jerome Powell signaled at an interest rate cut for the first time in a decade as soon as this month. He cited uncertainties about trade and the global economy as threats to US economic growth and thus a need to adopt a dovish stance.
Particularly, the Dow Jones Industrial Average topped 27,000 for the first time in its history, a day after the S&P 500 breached its new milestone of 3,000. The 1,000-point upward move for Dow Jones came in more than a year-and-a half as the benchmark hit 26,000 last January. With the latest rally, the benchmark has gained nearly 16% this year (read: 10 Stocks of S&P 500 ETF Up More Than 60% This Year).
Additionally, positivity surrounding trade has been the biggest catalyst for the stocks this year. The trade truce between the United States and China once again boosted investors’ confidence. Further, the rising oil price and a host of mergers & acquisitions added to this upside.
Given this, SPDR Dow Jones Industrial Average ETF (DIA - Free Report) tracking the Dow Jones Index has rallied 17.5% so far this year. Let’s take a closer look at the fundamentals of DIA and its performance.
DIA in Focus
This is one of the largest and the most popular ETFs in the large-cap space with AUM of $21.6 billion and average daily volume of 3.5 million shares. Holding 30 blue chip stocks, the fund is widely spread across components with each holding less than 9% share. Industrials (19.7%), information technology (19.3%), financials (15.1%), healthcare (13.1%) and consumer discretionary (12.9%) are the top five sectors. DIA charges 17 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Sector ETFs & Stocks to Bet On This Earnings Season).
Though most stocks in the fund’s portfolio have been moving north so far this year, we have highlighted those five best-performing stocks in the ETF that led the way higher with their respective positions in the fund’s basket:
Visa (V - Free Report) : The stock has surged nearly 37% so far this year and accounts for 4.5% share in DIA. It carries a Zacks Rank #2 (Buy) and has an unattractive VGM Score of D. The company has seen negative earnings estimate revision of a penny for the year (ending September 2019) over the past month and has an expected earnings growth rate of 16.49%. The stock is part of a top-ranked Zacks industry (top 38%). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Microsoft Corporation (MSFT - Free Report) : This stock accounts for 3.5% of the assets in the fund’s basket. It has increased 36.3% and witnessed no earnings estimate activity for the fiscal year (ending June 2020) over the past month. Its earnings are expected to grow 11.19%. Microsoft has a Zacks Rank #3 (Hold) and a favorable VGM Score of B. It belongs to a solid-ranked Zacks industry (top 43%).
Cisco (CSCO - Free Report) : The stock has jumped 32.2% and has 1.4% exposure in the fund’s basket. It saw no earnings estimate revision for the fiscal year (ending July 2019) over the past month and has an expected earnings growth rate of 18.46%. The company has a Zacks Rank #2 and an unimpressive VGM Score of C. However, it belongs to a top-ranked Zacks industry (top 33%) (read: ETFs in Focus on Cisco's Acacia Buyout Deal).
The Walt Disney Company (DIS - Free Report) : This stock takes 3.6% allocation in the fund’s basket and has climbed 30.9% in the same time frame. The stock saw positive earnings estimate revision of 8 cents for the fiscal year (ending September 2019) over the past month and has an estimated year-over-year earnings decline rate of 7.2%. Disney belongs to a bottom-ranked Zacks industry (bottom 15%). It has a Zacks Rank #4 (Sell) and a VGM Score of C.
Apple Inc. (AAPL - Free Report) : The stock has rallied about 27.9% so far this year. It saw negative earnings estimate revision of a penny in the past month for the fiscal year (ending September 2019) and its earnings are expected to decrease 3.69% year over year. Apple currently has a Zacks Rank #3 and a VGM Score of B. The stock falls under a top-ranked Zacks industry (top 4%) and occupies the sixth position in DIA with 5.1% exposure.
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