The Dow Jones Industrial Average ETF Trust (DIA 0.36%) is the only game in town when it comes to mirroring the performance of the Dow Jones Industrial Average. As the longest-tenured stock index -- with a track record of more than 100 years -- and one of the most visible indicators of economic activity, it's understandable that many investors would want to own the Dow in their portfolios.
Here, we'll give a brief overview of State Street's ETF tracker, The Dow Jones Industrial Average ETF Trust, and provide some recent performance data to see if the fund is right for your portfolio.
SPDR Dow Jones Industrial ETF Trust
Take a look at the fund's most recent performance and related metrics:
- Year-over-year performance (as of 3/12/2023): -3.13%
- Expense ratio, gross: 0.16%
- Dividend yield: 2.21%
- Assets Under Management (AUM): $27.51 billion
- Issuer and inception date: State Street Global Advisors Trust Company, 1/14/1988
Although there are other exchange-traded funds (ETFs) that seek to replicate the Dow's performance from different angles, State Street's ETF is the only pure Dow tracker weighted proportionally to the actual index. The fund also only holds the same 30 stocks as the Dow, making it as pure an ETF play as you can have.
The fund is much more concentrated than the S&P 500. The S&P 500, as the name indicates, contains 500 individual stocks; the Dow Jones only holds 30. The Dow Jones is also a price-weighted index, meaning that each fund derives its weight in the index from its current share price; the S&P 500, on the other hand, is weighted by company size, or market cap.
Even though the Dow hasn't performed particularly well over the past 12 months, it has outperformed many other major indices over the same period. Its components are generally considered some of the most influential companies in the U.S. economy, though there are no specific rules for inclusion in the index.
Finally, this ETF isn't particularly expensive, boasting an expense ratio of 0.16%. This tends to work in long-term investors' favor, since they get to keep the lion's share of their gains while keeping costs low.
Table of Holdings
| Company Name | Ticker | % of DIA assets | Description |
|---|---|---|---|
| UnitedHealth Group Incorporated | UNH | 9.50% | Large health insurance company offering healthcare products and services. |
| Goldman Sachs Group Inc. | GS | 6.99% | Multinational investment bank and financial services company. |
| Home Depot Inc. | HD | 5.88% | Home improvement retail corporation that sells tools and construction products, among other goods. |
| McDonald's Corporation | MCD | 5.35% | Global fast food chain. |
| Microsoft Corporation | MSFT | 5.16% | Software and technology company that produces operating systems as well as the Microsoft Office suite. |
| Caterpillar Inc. | CAT | 4.92% | The world's largest manufacturer of construction equipment. |
| Amgen Inc. | AMGN | 4.61% | One of the world's largest independent biotech companies. |
| Visa Inc. Class A | V | 4.50% | Facilitates electronic funds transfers through credit cards, debit cards, and prepaid cards. |
| Boeing Company | BA | 4.11% | Corporation that designs, manufactures, and sells aerospace equipment. |
| Honeywell International Inc. | HON | 3.94% | Multinational producer of performance materials and productivity solutions, among other goods. |
Is Investing In This Dow Jones ETF Right For You?
The Dow Jones Industrial Average Trust can play a role in the right portfolio context. Note that the fund comprises 30 large-cap stocks primary connected to the U.S. economy; it might fit well in a portfolio that already contains both mid- and small-cap stocks, as well as an allocation to foreign companies.
Like most sound investments, this fund is best held for the long-term. At the Fool, we believe that buy-and-hold investing is the key to building sustainable wealth, so you'll need to be able to commit to your investments for lengthy periods of time to see real results.
Be sure to do your research before putting money to work. If you need assistance, don't be afraid to ask for help or additional resources.
