# Diamonds ETF: Meaning, Popularity, Statistics

> **Definition**
>
> The Diamonds ETF, officially known as the SPDR Dow Jones Industrial Average ETF, is an exchange-traded fund that aims to replicate the DJIA's performance by holding the same 30 blue-chip stocks.

## What Is the Diamonds ETF?

Diamonds is an informal term for an index-based [exchange-traded fund (ETF)](https://www.investopedia.com/terms/e/etf.asp) known as the SPDR Dow Jones Industrial Average ETF. The Diamonds ETF trades on the [NYSE Arca exchange](https://www.investopedia.com/terms/n/nyse-arca.asp) under the ticker symbol DIA. The ETF's objective is to provide returns that mirror the price and yield performance of the Dow Jones Industrial Average (DJIA).

### Key Takeaways

*   The SPDR Dow Jones Industrial Average ETF is colloquially called the Diamond ETF, also known as the Dow Jones Diamond Index.
*   Since its launch in 1998, the Diamond ETF has become popular among investors as a way of achieving approximately the same returns as owning the individual stocks in the underlying Dow Jones Industrial Average.
*   Owning shares of Diamonds allows investors to attain the diversity of the DJIA with relatively low transaction fees.

## Understanding Diamonds

Launched in 1998, the SPDR Dow Jones Industrial Average ETF, also known as the Diamonds ETF, is managed by State Street Global Advisors. Since its launch, it has become popular among investors as a way of achieving approximately the same returns as owning the individual stocks in the underlying Dow Jones Industrial Average.

Investors can buy and sell shares of the ETF, just like with [common stocks](https://www.investopedia.com/terms/c/commonstock.asp). The fund's holdings consist of the 30 blue-chip stocks in the DJIA, in the same price-weighted proportion as they appear in the DJIA, as well as some cash holdings. At the end of 2023, the ETF was heaviest weighted in UnitedHealth Group, Microsoft, Goldman Sachs, Home Depot, and McDonalds.

> **Fast Fact**
>
> As of the beginning of December 2023, 9.93% of the SPDR Dow Jones Industrial Average ETF Trust was comprised of UnitedHealth Group.

## The Popularity of the Diamonds ETF

Diamonds are a popular and generally well-regarded fund. Owning shares of Diamonds allows investors to attain the diversity of the DJIA with relatively low transaction fees. The fund is highly regarded for its relatively low [gross expense ratio](https://www.investopedia.com/terms/g/gross-expense-ratio.asp) of 0.16%. Diamonds, like other ETFs, may offer some investors tax advantages over owning [mutual funds](https://www.investopedia.com/terms/m/mutualfund.asp).

The fund's large size provides ample share liquidity, and investors can buy or sell shares any time the exchange is open. The ETF's high [market capitalization](https://www.investopedia.com/terms/m/marketcapitalization.asp) and liquidity have spawned a variety of options chains from which traders can choose. The [NYSE](https://www.investopedia.com/terms/n/nyse.asp) allows investors to trade Diamond shares using [margin](https://www.investopedia.com/terms/m/margin.asp), as well as to short-sell Diamond shares.

On any given day, the stock's exchange volume may swell or shrink. As of Dec. 4, 2023, the ETF reported that 865,652 shares had been traded in the prior open market day. Note that this figure is updated every day, and the liquidity of an ETF may dramatically change at any given time.

## Diamonds ETF Statistics

As of Dec. 5, 2023, the fund had total net assets of over $31 billion, with over 86 million shares outstanding. The fund's [weighted average](https://www.investopedia.com/terms/w/weightedaverage.asp) market cap was about $515.5 million, at a price-earnings ratio of about 18.71. The fund has a 10-year [net asset value](https://www.investopedia.com/terms/n/nav.asp) of 10.62%.

It's important to remember that ETFs are not insured and may incur the loss of capital. For example, as of September 30, 2023, the ETF had a one-month NAV of -3.43% and quarter-to-date NAV of -2.14%. Since the fund's inception in 1998, the ETF had returned greater than 8%.

## Investing in Diamond Gemstones

Diamonds as [gemstones](https://www.investopedia.com/terms/g/gemology.asp) — not the ETF — are generally considered a poor investment vehicle, mainly due to the illiquidity of the market, a lack of price transparency, high transaction fees, and high risk related to quality assurance.

At one point, investors who wanted exposure to diamonds or other gemstones could have invested in GEMS, an ETF called PureFunds ISE Diamond/Gemstone ETF that invested in the diamond and gemstone industry. The ETF has since been liquidated and no longer exists. Since then, other indexes or funds have been created. For example, the IDEX Diamond Index was formulated and tracks diamond prices every hour.

## What Are the Benefits of Investing in Diamonds ETF?

Investing in the DIA ETF offers several benefits, including diversification across a range of industries, liquidity, and the ability to access the broader U.S. stock market. DIA provides investors with a well-rounded exposure to some of the most established and influential U.S. companies. The composition of DIA includes a bunch of blue chip stocks, but it also diversifies across a few industries.

## What Are the Risks Associated with Investing in the Diamonds ETF?

The risks of the Diamonds ETF are essentially the same as those of the broader stock market. Investments can lose their capital, and stocks may be susceptible to swings in economics conditions. It also faces all of the associated risks the 30 constituent companies of the ETF race such as geopolitical risk or market risk.

## Can I Hold Diamonds ETF in a Tax-Advantaged Account?

Yes, you can hold DIA ETF in tax-advantaged accounts such as Individual Retirement Accounts (IRAs) and 401(k)s.

## The Bottom Line

The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund that aims to replicate the performance of the Dow Jones Industrial Average (DJIA). it's a widely recognized index representing 30 major U.S. companies across various sectors. Some investors may know it by its nickname of Diamonds ETF, and Diamonds ETF aims to bring some diversification to investors while protecting investor funds with blue chip stocks.

> **Article Sources**
>
> 1.  State Street Global Advisors. "[SPDR Dow Jones Industrial Average ETF Trust, DIA](https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-dow-jones-industrial-average-etf-trust-dia)."
>     
> 2.  U.S. Securities and Exchange Commission. "[Mutual Funds and Exchange-Traded Funds (ETFs) – A Guide for Investors](https://www.sec.gov/about/reports-publications/investor-publications/introduction-mutual-funds)."
>     
> 3.  Bloomberg. "[PureFunds ISE Diamond/Gemstone ETF.](https://www.bloomberg.com/quote/GEMS:US#xj4y7vzkg)"
>     
> 4.  IDEX. "[Diamond Index.](http://idexonline.com/diamond_prices_index)"