The SPDR Dow Jones Industrial Average ETF Trust (DIA -0.4%) is the only ETF that replicates the performance of the Dow Jones Industrial Average, also known as DJIA or the Dow. The Dow includes 30 premium domestic stocks and is considered a primary benchmark of the U.S. financial markets.
Let’s explore the key characteristics of this ETF so you can decide if the SPDR Dow Jones Industrial Average ETF Trust is right for you.
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SPDR Dow Jones Industrial ETF Trust
SPDR Dow Jones Industrial ETF Trust
Take a look at the fund’s key facts:
- Average annual fund growth since inception (1998): 9.02%.
- Average annual growth of the Dow since fund inception: 9.19%.
- Gross expense ratio: 0.16%.
- Number of holdings: 30.
- Weighting methodology: Price-weighted.
- Issuer: State Street Global Advisors Trust Company.
Although there are other exchange-traded funds (ETFs) that use the Dow in some form, this SPDR ETF is the only pure Dow tracker. The ETF holds all 30 Dow stocks in the same proportion as the index. When the Dow rises, the fund should follow, with only a slight lag related to fund expenses.
You can see this in the performance numbers provided above. Since 1998, the fund has underperformed the index by 17 basis points. This difference is called “tracking error.” In well-managed funds, the largest component of tracking error should be the fund’s expense ratio.
Dow vs. S&P 500
Dow vs. S&P 500
The Dow is often quoted alongside the S&P 500, another large-cap index that is also investable via ETFs. Comparing the two indexes reveals two primary differences. The Dow is more concentrated than the S&P 500 and weights its holdings differently.
- Concentration. The Dow includes 30 sector-diversified stocks. The S&P 500 is also sector-diversified, but it includes 500 companies. Because the Dow’s portfolio is smaller, each stock has greater influence over the group’s cumulative performance.
- Weighting. The Dow sizes each position by the stock’s relative share price. In other words, more expensive stocks are held in larger proportions than less expensive stocks. The S&P 500 weights constituents by market capitalization, which is the total value of a company’s outstanding shares.
Another factor to consider is the cost of investing in each index. The SPDR Dow fund has an expense ratio of 0.16%, but there are S&P 500 ETFs with expense ratios less than 0.10%. A lower expense ratio allows more of the underlying investment returns to flow through to your bottom line.
Table of holdings
Table of holdings
|
Company (Ticker) |
Description |
|---|---|
|
Goldman Sachs (NYSE:GS) |
Multinational investment bank and financial services company. |
|
UnitedHealth Group (NYSE:UNH) |
Large health insurance company offering healthcare products and services. |
|
Microsoft (NASDAQ:MSFT) |
Software company and cloud services provider. |
|
Home Depot (NYSE:HD) |
Home improvement retail corporation that sells tools, construction products, and related products and services. |
|
Caterpillar (NYSE:CAT) |
Construction equipment manufacturer. |
|
Sherwin Williams (NYSE:SHW) |
Seller of paints and industrial coatings. |
|
Salesforce (NYSE:CRM) |
Provides software enterprises use to manage customer information. |
|
Visa (NYSE:V) |
Global payments processor. |
|
American Express (NYSE:AXP) |
Global payments processor. |
|
McDonalds (NYSE:MCD) |
Global fast food chain. |
|
Amgen (NASDAQ:AMGN) |
Pharmaceutical company. |
|
Travelers (NYSE:TRV) |
Provider of business, personal, and specialty insurance. |
|
JPMorgan Chase (NYSE:JPM) |
Financial services company offering banking, investment management, and commercial banking. |
|
Apple (NASDAQ:AAPL) |
Maker of smartphones, personal computers, and wearable devices. |
|
IBM (NYSE:IBM) |
Provider of technology hardware and related services. |
|
Honeywell International (NASDAQ:HON) |
Diversified conglomerate serving the aerospace, manufacturing, and facitlies industries. |
|
Amazon (NASDAQ:AMZN) |
Ecommerce company, cloud services provider, and seller of digital advertising. |
|
Procter & Gamble (NYSE:PG) |
Maker of branded consumer goods. |
|
Chevron (NYSE:CVX) |
Diversified oil and gas company. |
|
Boeing (NYSE:BA) |
Designer, manufacturer, and seller of airplanes and related aerospace equipment. |
|
Johnson & Johnson (NYSE:JNJ) |
Pharmaceutical company. |
|
Nvidia (NASDAQ:NVDA) |
Maker of semiconductor and related technology hardware and software. |
|
3M (NYSE:MMM) |
Diversified conglomerate providing safety and industrial equipment, materials for the transportation industry, and consumer products for personal care and home cleaning. |
|
Walt Disney (NYSE:DIS) |
Media and entertainment company. |
|
Merck (NYSE:MRK) |
Maker of pharmaceuticals and animal care products. |
|
Walmart (NYSE:WMT) |
Mass market discount retailer. |
|
Nike (NYSE:NKE) |
Designer, maker, and seller of men’s and women’s apparel. |
|
Coca Cola (NYSE:KO) |
Global beverage company. |
|
Cisco Systems (NASDAQ:CSCO) |
Provider of telecommunications and security hardware and software. |
|
Verizon (NYSE:VZ) |
Telecommunications provider. |
Related investing topics
Should you invest?
Is investing in this Dow Jones ETF right for you?
The SPDR Dow Jones Industrial Average Trust can play a role in the right portfolio context. Because the fund consists of 30 domestic large-cap stocks, it might fit well in a portfolio that already contains both mid- and small-cap stocks and an allocation to foreign companies.
Like most sound investments, this fund is best held for the long term. Buy-and-hold investing is the simplest way to build sustainable wealth, too. So, plan on committing for the long haul to see real results.
FAQ
Dow Jones ETF FAQ
What is the best ETF for the Dow Jones?
The SPDR Dow Jones Industrial Average ETF Trust is the only ETF that tracks the Dow Jones Industrial Average. Other ETFs use the Dow but do not hold all 30 Dow stocks in the same weightings as the DJIA index.
Does DJIA have an ETF?
There is only one ETF that seeks to replicate the DJIA exactly. It is the SPDR Dow Jones Industrial Average ETF Trust, which trades under the ticker DIA.
Is DIA a good ETF?
DIA is a low-cost ETF that tracks the performance of the Dow Jones Industrial Average. It is a good fund for investors wanting exposure to 30 blue chip stocks without having to buy them individually.
Does the Dow Jones have an index fund?
There is an index fund that tracks the Dow Jones Industrial Average. The fund name is SPDR Dow Jones Industrial Average ETF Trust, and its ticker is DIA.
