A smart beta exchange traded fund, the Invesco Dow Jones Industrial Average Dividend ETF (DJD) debuted on 12/16/2015, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $498.99 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Dow Jones Industrial Average Yield Weighted index.
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.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for DJD are 0.07%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.38%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector - about 23.7% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Unitedhealth Group Inc (UNH) accounts for about 8.7% of total assets, followed by Chevron Corp (CVX) and Cisco Systems Inc (CSCO).
The top 10 holdings account for about 53.97% of total assets under management.
Performance and Risk
The ETF return is roughly 16.63% and is up about 24.15% so far this year and in the past one year (as of 08/14/2026), respectively. DJD has traded between $54.08 and $66.15 during this last 52-week period.
DJD has a beta of 0.69 and standard deviation of 11.89% for the trailing three-year period. With about 30 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco Dow Jones Industrial Average Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard 500 Index Fund ETF Shares (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $907.77 billion in assets, Vanguard 500 Index Fund ETF Shares has $1038.97 billion. IVV has an expense ratio of 0.03% and VOO changes 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend
Bottom Line
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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Invesco Dow Jones Industrial Average Dividend ETF (DJD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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