ETF Trends
ETF Trends

The Dow Jones Industrial Average and related exchange traded funds are outpacing the S&P 500 as President-elect Donald Trump’s promises to increase fiscal spending and ease financial sector regulations helped the index standout.

The Dow is pushing toward new heights and outperforming the S&P 500, with the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA), which tracks the Dow Jones Industrial Average, up 7.9% over the past month, compared to the 6.0% gain in the S&P 500.

Additionally, the Guggenheim Dow Jones Industrial Average Dividend ETF (NYSEArca: DJD), which weighs the 30 Dow stocks by yield, rose 6.0% in the past month.

The S&P 500 is trading near its largest discount to the Dow since May 2014, with the two indices being at their least correlated in almost six years as blue-chips strengthened on the improved outlook for industrial and banks following Trump’s victory while weakness in tech and utilities dragged on the S&P 500, reports Emma O’Brien for Bloomberg.

A strengthening U.S. dollar also weighed on the S&P 500, which has a large exposure to multi-national companies with a global footprint.

Meanwhile, speculation on Trump’s more U.S.-centric policies favored U.S. manufacturers and big factory employers, bolstering the Dow, which tracks big industrial names like General Electric (NYSE: GE) and Boeing (NYSE: BA).

The Dow is also set to outpace the S&P 500 for the first time since 2011. Year-to-date, DIA increased 13.0% and DJD advanced 12.1%, whereas the S&P 500 gained 10.1%. Supporting the recent gains in the Dow, industrial stocks jumped 7.9% since the election and financials surged 15%.

DIA’s two largest sector components include industrials 19.8% and financials 17.8%, whereas the S&P 500 includes a hefty 20.6% in the underperforming tech sector, along with smaller 14.9% financials and 10.5% industrial weights.

For more information on the Dow, visit our Dow Jones Industrial Average category.