Blue chip stocks are large, well-established companies with proven track records. They are typically more stable than your average stock, but they're not risk-free.
To reduce some of this risk, it's worth considering a blue-chip exchange-traded fund (ETF), and one of the leading ones is the SPDR Dow Jones Industrial Average ETF (DIA 0.17%).
The reason DIA is one of the leading blue chip ETFs is that it's one of the few pure blue chip ETFs. It tracks the Dow Jones Industrial Average (^DJI 0.17%), better known as the Dow Jones. It's one of the U.S. stock market's three major indexes, containing 30 U.S. blue chip stocks.
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One problem is that many blue chip ETFs, like those tracking the S&P 500 (^GSPC 0.06%), have become overconcentrated in megacap tech stocks because they're weighted by market caps. For perspective, Nvidia, Microsoft, and Apple are the S&P 500's top three holdings, and they alone make up over 21% of the 500-plus stock index.
What's included in the SPDR Dow Jones Industrial Average ETF
Although DIA may be considered top-heavy, it offers more diversification than the S&P 500 and other blue chip ETFs and provides good exposure to great companies across multiple sectors. Here are its top 10 holdings:
- Goldman Sachs: 10.44% of the ETF
- Microsoft: 6.66%
- Caterpillar: 5.74%
- Home Depot: 5.63%
- Sherwin-Williams: 4.90%
- UnitedHealth Group: 4.70%
- Visa: 4.57%
- American Express: 4.38%
- McDonald's: 4.10%
- JPMorgan Chase: 4.06%
Each of these companies is a market leader, has a long history of strong financials, and pays a dividend. That's a trifecta that makes investing in DIA worth it. If you do, you know you're investing in an ETF that's built for longevity.
