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Amid the DeepSeek sell-off and Trump’s tariff tantrums, the Dow Jones Industrial Average Index showed its resilience and emerged stronger than the other two major indices last month. The blue-chip index logged the best January since 2019, gaining 4.2%. SPDR Dow Jones Industrial Average ETF DIA, which tracks the Dow Jones, gained nearly 4.4% in January.
While most of the stocks in the fund’s portfolio pushed the ETF up, we have highlighted the ones that have led the way higher. These are 3M Company MMM, International Business Machines Corporation IBM, The Goldman Sachs Group Inc. GS, JPMorgan Chase & Co. JPM and Amgen AMGN.
The outperformance came on the back of its tilt toward value stocks. Value stocks seek to capitalize on the inefficiencies in the market and have the potential to deliver higher returns with lower volatility compared with their growth and blend counterparts. These stocks are less susceptible to trending markets and their dividend payouts offer safety in times of market turbulence (read: Can Dow Jones ETFs Fare Better in New Year Than 2024?).
Earnings optimism has also instilled confidence in the blue-chip index. The rounds of solid corporate earnings from Dow components drove the blue-chip index higher. Additionally, improving economic indicators, such as strong December job numbers, rising consumer spending and robust manufacturing activity, helped Dow Jones move higher. Being cyclical in nature, the blue-chip index outperforms when economic growth improves.
Further, the bloodbath in the technology sector triggered by the emergence of DeepSeek, a China-based artificial intelligence (AI) startup, provided an edge to the blue-chip index. Notably, the Dow Jones is not heavily weighted toward the technology sector and thus, it emerged stronger during that time (read: DeepSeek AI Fears Overrated? ETFs in Focus).
Let’s take a closer look at the fundamentals of DIA.
DIA in Focus
With AUM of $38 billion, DIA holds 30 stocks in its basket, with each security holding no more than 8.8% share. The fund is widely spread across sectors, with financials, information technology, healthcare and consumer discretionary being the top three. It charges 16 basis points in fees per year from investors and trades in heavy volume of around 3 million shares a day on average. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Here are the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Top Performing Stocks of DIA
3M Company has manufacturing operations across the globe and serves a diversified customer base. The stock saw a positive earnings estimate revision of a penny over the past 30 days for this year. MMM was up 17.9% in January and has a Zacks Rank #3 (Hold).
International Business Machines has gradually evolved as a provider of cloud and data platforms. It jumped 16.3% last month and saw a solid earnings estimate revision of 12 over the past 30 days for this year. IBM has a Zacks Rank #3 (read: IBM Soars to New Highs on Q4 Earnings Beat: ETFs to Tap).
Goldman is a leading global financial holding company that provides IB, securities, investment management and consumer banking services to a diversified client base. The stock soared 11.8% last month and saw a solid earnings estimate revision of $4.06 over the past 30 days for this year. Goldman has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
JPMorgan is one of the biggest global banks, with assets worth $4 trillion and stockholders’ equity worth $344.8 billion as of Dec. 31, 2024. With operations in more than 60 countries, the company is one of the largest financial service firms in the world. The stock gained 11.5% in January. Its earnings estimates have moved up from $16.77 to $17.82 over the past 30 days for this year. JPMorgan sports a Zacks Rank #1 (read: ETFs to Play Upbeat Bank Earnings).
Amgen is one of the biggest biotech companies in the world, with a strong presence in the oncology/hematology, cardiovascular disease, neuroscience, inflammation, bone health and nephrology and neuroscience markets. The stock saw solid earnings estimate revision of 18 cents over the past 30 days for this year. Amgen was up 9.5% last month and has a Zacks Rank #3.