DIA(Diamonds Trust) vs. DOW Members...what am I missing?

[yoyomama]

So Dow Diamonds(DIA) is an exchange-traded fund that holds the 30 stocks that comprise the DOW.

I was curious & bored, so I was doing some math...operator error is possible for sure but I tried to check my math.

For a 100 day period from 7/21/09... DIA returned 17.80% and the 30 Dow Members average returned 20.26%. Okay so if you bought all 30 DOW stocks you'd have to figure in fees but it seems to be a better deal...no?


BTW....Kraft(KFT) is the only one of the 30 that lost money in that 100 day period.

[Karel]

So Dow Diamonds(DIA) is an exchange-traded fund that holds the 30 stocks that comprise the DOW.

I was curious & bored, so I was doing some math...operator error is possible for sure but I tried to check my math.

For a 100 day period from 7/21/09... DIA returned 17.80% and the 30 Dow Members average returned 20.26%. Okay so if you bought all 30 DOW stocks you'd have to figure in fees but it seems to be a better deal...no?


BTW....Kraft(KFT) is the only one of the 30 that lost money in that 100 day period.

Depends. DIA and virtualy all other indices/index ETFs are market cap weighted. If the lighter stocks gain more and you invest an equal dollar amount, you’ll do better to buy the DOW as single stocks. But if the “heavier” stocks start rolling, things work the other way around.

BTW, a real backtest would be over 5-10 years. And the curent time is rather exceptional, so you might test a decade or more back to check the results of your first test. It all depends on how bored you are...

Regards,

Karel

[yoyomama]

Got it...yeah DIA's been out performing the DOW 30 the past two days.

[IIC]

Got it...yeah DIA's been out performing the DOW 30 the past two days.

I don't follow those but I do follow something similar...The Q's and the NDX (Nasdaq 100)...so I can daytrade QLD and QID.

Anyway, the Q's try to mimic the NDX...But the Q's holdings are not necessarily in Sync percentage-wise with the NDX component weightings.

And anyway...on the ETF's supply/demand is more important than what the components are doing.

Just food for thot...Best, Doug