Advertisement
New Zealand markets closed
  • NZX 50

    11,783.39
    -26.09 (-0.22%)
     
  • NZD/USD

    0.6123
    +0.0021 (+0.35%)
     
  • NZD/EUR

    0.5638
    +0.0000 (+0.01%)
     
  • ALL ORDS

    7,999.20
    -83.90 (-1.04%)
     
  • ASX 200

    7,727.60
    -84.20 (-1.08%)
     
  • OIL

    77.80
    +0.93 (+1.21%)
     
  • GOLD

    2,335.20
    -2.00 (-0.09%)
     
  • NASDAQ

    18,808.35
    +184.96 (+0.99%)
     
  • FTSE

    8,317.59
    -21.64 (-0.26%)
     
  • Dow Jones

    39,069.59
    +4.33 (+0.01%)
     
  • DAX

    18,693.37
    +2.05 (+0.01%)
     
  • Hang Seng

    18,608.94
    -259.77 (-1.38%)
     
  • NIKKEI 225

    38,646.11
    -457.11 (-1.17%)
     
  • NZD/JPY

    96.0860
    +0.3840 (+0.40%)
     

Should Invesco Dow Jones Industrial Average Dividend ETF (DJD) Be on Your Investing Radar?

If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than 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 $257.77 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

Companies that find themselves in the large cap category 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.

ADVERTISEMENT

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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 3.36%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 17% of the portfolio. Consumer Staples and Healthcare round out the top three.

Looking at individual holdings, Verizon Communications Inc (VZ) accounts for about 8.95% of total assets, followed by Walgreens Boots Alliance Inc (WBA) and 3m Co (MMM).

The top 10 holdings account for about 58.08% 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 lost about -2.66% so far this year and is down about -5.19% in the last one year (as of 06/07/2023). In the past 52-week period, it has traded between $37.49 and $45.73.

The ETF has a beta of 0.82 and standard deviation of 16.35% for the trailing three-year period. With about 29 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 sufficient 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 $318.24 billion in assets, SPDR S&P 500 ETF has $407.07 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Invesco Dow Jones Industrial Average Dividend ETF (DJD): ETF Research Reports

Verizon Communications Inc. (VZ) : Free Stock Analysis Report

3M Company (MMM) : Free Stock Analysis Report

SPDR S&P 500 ETF (SPY): ETF Research Reports

Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report

iShares Core S&P 500 ETF (IVV): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research