Key Points
The Dow Jones Industrial Average gained 8.9% during the first six months of 2026, making this the best first half of a year it’s had since 2021, according to CNBC. Is this a sign that you should buy an exchange-traded fund (ETF) of these blue chip stocks?
The SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT: DIA) lets you invest in “the Dow.” But what does it mean to buy the Dow Jones Industrial Average, and how does this ETF compare with other choices?
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Let’s look at the SPDR Dow Jones Industrial Average ETF Trust and see if it could be a good buy for your portfolio.
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SPDR Dow Jones Industrial Average ETF Trust (DIA): 30 stocks, 10 years of 13.3% annualized returns
The Dow Jones Industrial Average tends to get a lot of news headlines, and for good reason. This benchmark index has been around since 1896, and looking at “the Dow” is a widely recognized way to take the temperature of the U.S. stock market.
But what exactly is the Dow? It is not “the stock market.” Instead, it’s a price-weighted index of 30 “blue chip” U.S. stocks. These companies are large, steadily profitable, and well regarded for their importance to the U.S. stock market. Companies can be added to or removed from the Dow over time based on their performance.
In the same way that S&P 500 ETFs track the performance of the S&P 500 index benchmark, the SPDR Dow Jones Industrial Average ETF (DIA) holds the same 30 stocks as the Dow. The Dow ETF’s top five stock holdings are:
This SPDR fund offers exposure to a much narrower piece of the market than a total stock market ETF. But it lets you buy the entire Dow Jones Industrial Average for a relatively low expense ratio of 0.16%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) has delivered average annual returns (by net asset value) of about 22.5% in the past year, 10% in the past five years, and 13.3% in the past 10 years.
Should you buy DIA?
Buying an ETF of 30 of the best-known stocks in America might seem like a good bet. The Dow is constantly quoted in the news as a proxy for the overall U.S. stock market. But just because people talk about it on financial TV doesn’t mean it’s the best buy for your portfolio.
Here’s a big reason to be cautious when buying this ETF. The Dow Jones Industrial Average is only 30 stocks. Because of that focus on blue chips, this fund is not as diversified as the S&P 500 index, and it’s not full of major tech names like the Nasdaq-100 index. During the past 10 years, this Dow Jones ETF has strongly underperformed both of those benchmarks:
DIA Total Return Level data by YCharts
If you want a broadly diversified portfolio, buying the Dow might put too much of your money into too few stocks. There’s no guarantee that any ETF will outperform the market, and there’s no guarantee that the Dow Jones Industrial Average is better at picking the best stocks. For many long-term investors, buying S&P 500 ETFs or investing in growth stocks through a Nasdaq-100 ETF might be a better choice than buying the Dow.
Should you buy stock in SPDR Dow Jones Industrial Average ETF Trust right now?
Before you buy stock in SPDR Dow Jones Industrial Average ETF Trust, consider this:
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Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, Caterpillar, Goldman Sachs Group, and Microsoft. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
