The benchmark is quirky in other ways. “Unlike most indexes, the DJIA weights its constituents by their share price, rather than market-cap,” writes Morningstar analyst Alex Bryan in a review of the Dow ETF.
“The index construction methodology does not follow mechanical rules, so there are no firm guidelines dictating how or when the committee overseeing the index will pick new constituents,” he adds. “Despite these idiosyncrasies, the DJIA had a 0.97 correlation with the market-cap weighted S&P 500 Index over the past 10 years.”
DIA is a popular and highly liquid ETF with $1.3 billion in assets. It charges an expense ratio of 0.17%.
SPDR Dow Jones Industrial Average ETF
Full disclosure: Tom Lydon’s clients own SPY and QQQ.