Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the SPDR Dow Jones Industrial Average ETF (DIA), a passively managed exchange traded fund launched on 01/13/1998.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $35.77 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.16%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.66%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 24% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Goldman Sachs Group Inc (GS) accounts for about 8.19% of total assets, followed by Unitedhealth Group Inc (UNH) and Microsoft Corp (MSFT).
The top 10 holdings account for about 54.71% of total assets under management.
Performance and Risk
DIA seeks to match the performance of the Dow Jones Industrial Average before fees and expenses. The Dow Jones Industrial Average is composed of thirty blue-chip U.S. stocks.
The ETF has lost about -4.74% so far this year and is up about 8.77% in the last one year (as of 04/16/2025). In the past 52-week period, it has traded between $376.48 and $450.94.
The ETF has a beta of 0.91 and standard deviation of 15.65% for the trailing three-year period, making it a medium risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR Dow Jones Industrial Average ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DIA is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $65.67 billion in assets, Vanguard Value ETF has $127.25 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.
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SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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