Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Invesco Dow Jones Industrial Average Dividend ETF (DJD), a passively managed exchange traded fund launched on 12/16/2015.
The fund is sponsored by Invesco. It has amassed assets over $319.20 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.25%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 16.50% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ) accounts for about 10.61% of total assets, followed by Chevron Corp (CVX) and Cisco Systems Inc (CSCO).
The top 10 holdings account for about 57.95% of total assets under management.
Performance and Risk
DJD seeks to match the performance of the Dow Jones Industrial Average Yield Weighted index before fees and expenses. The Dow Jones Industrial Average Yield Weighted Index provides exposure to high-yielding equity securities in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months.
The ETF has added about 13.48% so far this year and is up roughly 13.28% in the last one year (as of 12/30/2024). In the past 52-week period, it has traded between $45.23 and $54.19.
The ETF has a beta of 0.82 and standard deviation of 13.71% for the trailing three-year period. With about 28 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dow Jones Industrial Average Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DJD is a good option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $594.49 billion in assets, SPDR S&P 500 ETF has $630.14 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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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Get it free >>Invesco Dow Jones Industrial Average Dividend ETF (DJD): ETF Research Reports
Chevron Corporation (CVX) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
