ETF Trends
ETF Trends

The Dow Jones Industrial Average has age and venerability on its side, but due to its oft-criticized price-weighting methodology and being home to just 30 stocks, the Dow and the SDPR Dow Jones Industrial Average ETF’s (NYSEArca: DIA) have long been deemed less than relevant.

Perhaps the recent addition of Apple (NasdaqGS: AAPL) to the Dow will change that and spark renewed interest in DIA. Since March 6, the day S&P Dow Jones Indices announced Apple would replace AT&T (NYSE: T) in the Dow, DIA has added just over $102 million in assets. [Apple is Coming to the Dow ETF]

Since March 19, the day Apple debuted in the Dow, DIA has added nearly $336 million in assets. Perhaps that is just a coincidence, but is notable when considering that despite impressive showings in 2014 and 2013, DIA lost over $1.3 billion in assets combined over those two years.

Although Apple is the world’s largest company by market value, also making it the largest holding in an array of cap-weighted ETFs, the stock is not DIA’s largest holding due to the Dow’s aforementioned price-weighting methodology. Entering trading Thursday, Apple was DIA’s fifth-largest holding with a weight of 4.64%.

To put the skew created by the Dow’s price-weighting methodology in perspective, International Business Machines (NYSE: IBM) has a weight in DIA that is 35 basis points larger than Apple’s even though IBM’s market value is $566 billion smaller than the iPhone maker’s at this writing. [A Look at Apple ETFs]

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