Is Invesco Dow Jones Industrial Average Dividend ETF (DJD) a Strong ETF Right Now?

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 traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.Fund Sponsor & IndexBecause the fund has amassed over $338.46 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Blend. DJD is managed by Invesco. This particular fund 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.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Operating expenses on an annual basis are 0.07% for DJD, making it one of the least expensive products in the space.DJD's 12-month trailing dividend yield is 2.16%.Sector Exposure and Top HoldingsWhile 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.For DJD, it has heaviest allocation in the Information Technology sector --about 16.40% of the portfolio --while Financials and Healthcare round out the top three.Taking into account individual holdings, Verizon Communications Inc (VZ) accounts for about 10.53% of the fund's total assets, followed by Chevron Corp (CVX) and Cisco Systems Inc (CSCO).Its top 10 holdings account for approximately 59.15% of DJD's total assets under management.Performance and RiskThe ETF has added about 4.50% so far this year and is up about 14.78% in the last one year (as of 03/18/2025). In the past 52-week period, it has traded between $46 and $54.48.The ETF has a beta of 0.81 and standard deviation of 13.59% for the trailing three-year period. With about 28 holdings, it has more concentrated exposure than peers.AlternativesInvesco 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.Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. Vanguard S&P 500 ETF has $595.62 billion in assets, SPDR S&P 500 ETF has $611.13 billion. VOO has an expense ratio of 0.03% and SPY charges 0.09%.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 LineTo 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 key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 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 Vanguard S&P 500 ETF (VOO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks