Most investors are familiar with the Dow Jones Industrial Average, although many don’t realize it’s composed of just 30 large…
Most investors are familiar with the Dow Jones Industrial Average, although many don’t realize it’s composed of just 30 large U.S. stocks, handpicked by representatives from S&P Dow Jones Indices and the Wall Street Journal.
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The size and method of stock selection mean the index has some limitations relative to the much broader S&P 500, whose composition is determined by market capitalization. The Dow, in contrast, is price-weighted, meaning stocks with the highest price have the biggest influence over index movements.
The Dow recently rallied to a new intraday high with an assist from Warren Buffett, whose Berkshire Hathaway Inc. (ticker: BRK.B, BRK.A) bought 5 million shares of UnitedHealth Group Inc. (UNH).
An exchange-traded fund, or ETF, tracking the Dow offers investors concentrated exposure to well-established blue-chip leaders, rather than the broader mix of names in the S&P 500.
Because many Dow Jones components are mature dividend payers, the index often provides more consistent income than growth-heavy alternatives.
For example, the S&P 500 has been tilted toward technology, whereas the Dow Jones is more heavily weighted toward industrials, health care and financials.
Here are seven ETFs that can give investors exposure to the Dow. Note that these use several approaches to capture index performance:
— SPDR Dow Jones Industrial Average ETF (DIA)
— Invesco DJIA Dividend ETF (DJD)
— First Trust Dow 30 Equal Weight ETF (EDOW)
— ProShares Ultra Dow30 (DDM)
— ProShares UltraPro Dow30 (UDOW)
— Global X Dow 30 Covered Call ETF (DJIA)
— Global X Dow 30 Covered Call & Growth ETF (DYLG)
SPDR Dow Jones Industrial Average ETF (DIA)
This is the only ETF that directly tracks the Dow index. It’s by far the largest and most liquid ETF tracking the Dow, with $39 billion under management. With an average daily trading volume of 3.5 million shares, it offers the necessary liquidity for both institutional and individual investors.
DIA launched in January 1998, making it the first ETF to measure Dow performance. The most heavily weighted holdings are Goldman Sachs Group Inc. (GS), Microsoft Corp. (MSFT) and Caterpillar Inc. (CAT).
“With a net expense ratio of just 0.16%, DIA offers a low-cost alternative to buying individual DJIA stocks or investing in actively managed funds,” says Craig Bolanos, co-founder and wealth advisor at VestGen Wealth Partners in Inverness, Illinois.
“The ETF structure also provides potential tax advantages, including reduced capital gains distributions compared to mutual funds,” he says.
Invesco DJIA Dividend ETF (DJD)
“DJD uses dividend yield weighting, offering higher yields than DIA and appealing to long-term, income-focused investors,” says Jack Fu, co-founder and CEO at Draco Evolution in Newport Beach, California. His company manages the Draco Evolution AI ETF (DRAI).
Despite DJD’s strength in generating income, it also has some drawbacks, Fu cautions. “It may lag in bull markets due to heavier weight in slower-growth sectors and has lower liquidity,” he says. Also, this is a much smaller fund than DIA, with just $353 million under management.
However, its 2.7% yield may appeal to income seekers. This ETF gives more weight to Dow stocks that pay bigger dividends, while the traditional DIA simply follows stock prices. The largest holdings are Johnson & Johnson (JNJ), Merck & Co. Inc. (MRK) and Amgen Inc. (AMGN).
[See 10 of the Best Blue-Chip Stocks to Buy]
First Trust Dow 30 Equal Weight ETF (EDOW)
This ETF gives each Dow stock the same importance, rather than letting the higher-priced stocks dominate. This means smaller companies in the Dow get just as much influence as the larger ones, offering a more balanced version of the index.
“This approach can smooth out returns and limit single-stock risk — important considerations for those in retirement aiming to preserve capital,” Bolanos says.
This is a relatively small ETF, with $222 million under management.
On a five-year and three-year basis, it’s underperformed DIA, but only slightly. Part of that is due to EDOW’s higher expense ratio of 0.5%, versus DIA’s fee of 0.16%. On a one-year basis, EDOW has outperformed.
“EDOW could outperform in market slowdowns, but investors will need to strongly consider whether or not its small asset base and higher expense ratio make it worthy of a long-term hold versus a tactical trade,” Bolanos says.
ProShares Ultra Dow30 (DDM)
This ETF seeks daily investment results, before fees and expenses, corresponding to twice the daily performance of the Dow. In other words, if the Dow is up 1% for the session, this ETF is up 2%.
Of course, it also works the other way: If the Dow is down 1%, this ETF is down 2%.
This fund mainly invests in stocks and uses financial tools called derivatives, like swaps and futures, which allow it to trade based on the value of the underlying assets. It also keeps some cash in very safe, short-term investments such as U.S. Treasury bills.
While the combination of stock ownership, advanced contracts and safe cash holdings are designed to balance growth potential with flexibility, investors should be aware of the added downside risks. Also, because this strategy is more complex than simply tracking an index, the expense ratio of 0.95% is on the steep side compared with DIA.
ProShares UltraPro Dow30 (UDOW)
This ETF ramps up the leverage, offering investors three times exposure to the Dow index. When the Dow is trending higher, this ETF can deliver strong returns. However, in a year like 2022, when U.S. stocks skidded, UDOW investors were hit especially hard; this ETF sank 32% by market price, while DIA was down 7%, according to Morningstar data. This period offers a clear example of leverage not only amplifying the magnitude of losses but also compounding them when markets are volatile. Every down day hit UDOW three times as hard, and it then had to climb out from deeper holes after each decline.
The next year, in 2023, UDOW gained 33% while DIA returned only 16%. However, investors’ experience in 2022 illustrates why leveraged ETFs are best suited for short-term trading rather than long-term holding.
Global X Dow 30 Covered Call ETF (DJIA)
This ETF aims to generate income through writing covered calls on the Dow. Historically, this has produced higher yields during bouts of market volatility.
Think of it like renting out stocks: By selling these options, the fund collects extra income, which shows up as higher yield.
When markets are choppy, option buyers pay more for protection, so a covered call ETF earns higher premiums as income. The trade-off is that in strong rallies, gains are capped because the ETF has already agreed to sell shares at predetermined levels.
As you might imagine, the component of active trading pushes the expense ratio higher; DJIA costs 0.6% to own.
Year to date, DJIA has underperformed its underlying index because the call-writing strategy limits investors’ upside participation when stocks are in a clear rally.
DJIA has a 7.4% forward yield.
Global X Dow 30 Covered Call & Growth ETF (DYLG)
This ETF fund invests in all 30 Dow stocks and writes call options on 50% of its holdings. This allows the ETF to collect income from sale premiums, resulting in a higher yield while still participating in about half of the potential upside if the Dow index rises.
Because it simply tracks the index in 50% of its allocation, its expense ratio of 0.35% is lower than DJIA, which uses covered calls throughout its portfolio.
So far in 2025, it’s outperformed DJIA, but underperformed the DIA index ETF.
This performance pattern makes intuitive sense: DYLG sacrifices some growth potential to generate extra income.
This is a very small ETF, with just $2.6 million under management. With low assets under management, daily trading volume may be light, resulting in wider bid-ask spreads.
That means you may pay more when buying and receive less when selling, compared with larger funds.
DYLG has a 3.6% forward yield.
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7 Best Dow Jones ETFs to Buy originally appeared on usnews.com