Diamonds ETF

What Is the Diamonds ETF?

Diamonds is a casual term for an index-based exchange-traded fund (ETF) known as the SPDR Dow Jones Industrial Average ETF. The Diamonds ETF trades on the NYSE Arca exchange under the ticker symbol DIA. The ETF's objective is to give returns that mirror the price and yield performance of the Dow Jones Industrial Average (DJIA).

Grasping Diamonds

Sent off in 1998, the Dow Jones Diamonds Index is managed by State Street Global Advisors. Since its send off, it has become famous among investors as an approach to achieving roughly similar returns as claiming the individual stocks in the underlying Dow Jones Industrial Average. Investors can buy and sell shares of the ETF, just like with common stocks. The fund's holdings comprise of the 30 blue-chip stocks in the DJIA, in a similar price-weighted extent as they show up in the DJIA, as well as some cash holdings.

The Popularity of the Diamonds ETF

Diamonds are a famous and generally very much respected fund. Claiming shares of Diamonds allows investors to accomplish the diversity of the DJIA with moderately low transaction fees. The fund is highly respected for its generally low gross expense ratio of 0.16%. Diamonds, as different ETFs, may offer a few investors tax benefits over possessing mutual funds. The fund's large size gives adequate share liquidity, and investors can buy or sell shares any time the exchange is open. The ETF's high market capitalization and liquidity have produced different options chains from which traders can pick. The NYSE allows investors to trade Diamond shares utilizing margin, as well as to short-sell Diamond shares.

Diamonds ETF Statistics

As of Sept. 10, 2020, the fund had total net assets of more than $22.65 billion, with almost 81 million shares outstanding. The fund's weighted average market cap was about $326.8 billion, at a price-earnings ratio of around 22.25. The fund has a 10-year net asset value of 13.60%.

Investing in Diamond Gemstones

Diamonds as gemstones- - not the ETF- - are generally viewed as a poor investment vehicle, chiefly due to the illiquidity of the market, a lack of price transparency, high transaction fees, and high risk connected with quality assurance. Investors who need exposure to diamonds could reduce a portion of the risks by claiming GEMS, an ETF that puts resources into the diamond and gemstone industry. Numerous rich individuals look at diamonds as a wise investment since they can buy high-priced stones with somewhat low transaction expenses, and they can partake in the diamonds while their value develops, similarly as with collectibles or art.

Highlights

• Claiming shares of Diamonds allows investors to achieve the diversity of the DJIA with generally low transaction fees.
• Since its send off in 1998, the Diamond ETF has become famous among investors as an approach to achieving roughly similar returns as possessing the individual stocks in the underlying Dow Jones Industrial Average.
• The SPDR Dow Jones Industrial Average ETF is informally called the Diamond ETF, otherwise called the Dow Jones Diamond Index.