Hidden Dow Jones ETFs Smart Investors Are Buying Now

ByDan Kent Published On:

​
​
My Best ETF for 2025

I like the diversified element of this fund and the lack of certain industries, at a reasonable fee. I think this ETF has significant potential in Canada's market moving forward. Grab my report for yourself for free below:

    We won't send you spam. Unsubscribe at any time.

    ​
    ​Free Report: High Quality Niche ETF

    I like the diversified element of this fund and the lack of certain industries, at a reasonable fee. I think this ETF has significant potential in Canada's market moving forward.

    Get my report below:

      We won't send you spam. Unsubscribe at any time.

      ETF investors: my case study has fundamentally changed how ETF investors look at the markets and their portfolios.

        Key takeaways

        Income vs. Growth Strategies – While some ETFs focus on passive index tracking, others use covered call strategies to enhance income potential.

        Dow Jones ETFs Offer Stability – These ETFs track the Dow Jones Industrial Average (DJIA), which includes 30 blue-chip U.S. companies known for strong financials and market influence.

        Currency Hedging Options Matter – Canadian investors can choose between hedged and unhedged versions to manage currency risk against the U.S. dollar.

        One ETF I like way better than the ones on this list.

        The Dow Jones is among the oldest stock market indexes in North America. It was launched in 1896 and has served as a prominent benchmark of the US economy for numerous years.

        Not many people utilize the Dow Jones anymore as a benchmark index. Many analysts and fund managers use the S&P 500 or NASDAQ indexes as benchmarks, depending on what type of stock or fund they’re looking at.

        The Dow Jones still has its uses, and many investors still utilize the index today.

        What exactly is the Dow Jones Industrial Average?

        The Dow Jones Industrial Average, or as many call it, “the Dow,” is a stock market index that aims to track the 30 most prominent companies in the United States. A notable thing about the Dow is that it is a “price-weighted index,” meaning a larger share price is favoured over a larger market capitalization.

        Although the Dow can contain any particular type of stock, it contains some of the most prominent blue-chip stocks in the world, such as:

        • Apple
        • American Express
        • Microsoft
        • Home Depot
        • Johnson & Johnson
        • McDonalds
        • Visa

        As a result, many investors want exposure to the Dow, particularly those in Canada. We can do so through a handful of Canadian ETFs, and in this article I’ll tackle ones that cover the Dow Jones.

        Keep in mind, depending on your brokerage commissions, you may be able to buy these commission free. Over the long run, this can definitely have an impact on investment results, so check to see if you can buy them for free.

        Only two here are Canadian-listed, and they are both from the Bank of Montreal.

        What are the top Dow Jones ETFs in Canada right now?

        Currency-hedged exposure to U.S. blue-chip stocks

        BMO Dow Jones Ind Avg Hdgd to CAD ETF (ZDJ.TO)

        ZDJ.TO tracks the DJIA with a currency hedge to neutralize U.S. dollar fluctuations. This ETF offers Canadian investors direct exposure to America’s largest and most stable companies while reducing FX risk. It provides a cost-effective way to invest in the Dow Jones with passive index tracking.

        • Exposure to Leading U.S. Companies – The Dow Jones includes industry giants like Apple, Microsoft, and Johnson & Johnson, offering diversification across sectors.
        • Currency Hedge for Stability – The CAD-hedged feature protects Canadian investors from USD volatility, reducing currency-related swings.
        • Lower Volatility Than the S&P 500 – The DJIA tends to be less volatile than broader indices, making it attractive for conservative investors.
        • Dividend Income Potential – Many Dow components pay stable dividends, supporting long-term income generation.
        • Low Management Fees – BMO offers competitive pricing, keeping costs low for passive investors.
        • Economic Growth and Inflation – Blue-chip companies may outperform in a strong economy but could face headwinds if inflation remains high.
        • Interest Rate Policy – Federal Reserve decisions on rates will influence Dow components, particularly financial and industrial stocks.
        • Technological Innovation – Companies like Apple and Microsoft in the Dow drive tech-led growth, impacting ETF returns.
        • Global Trade and Supply Chains – Dow stocks, particularly industrials, are sensitive to trade policies and supply chain disruptions.
        • Limited Tech Exposure – Unlike the S&P 500, the Dow has fewer high-growth tech stocks, potentially limiting upside.
        • Market Corrections – While blue-chip stocks are resilient, economic downturns can still impact performance.
        • Hedging Costs – Currency hedging isn’t free; costs may reduce long-term returns compared to unhedged alternatives.

        Enhanced yield with a covered call strategy

        BMO Covered Call DJIA Hedged to CAD ETF (ZWA.TO)

        ZWA.TO also tracks the DJIA but employs a covered call strategy to generate additional income. This ETF is designed for investors seeking a balance between capital appreciation and consistent yield, making it a good choice for income-focused portfolios.

        • Income Generation via Covered Calls – Selling options on holdings generates extra cash flow, boosting yield.
        • Reduced Volatility – The covered call strategy smooths returns, making it appealing in uncertain markets.
        • Exposure to High-Quality U.S. Stocks – Still benefits from blue-chip holdings like Boeing, Visa, and Goldman Sachs.
        • Better Suitability for Conservative Investors – Investors who prioritize steady income over high growth may prefer this ETF.
        • Currency Hedging for Stability – Helps mitigate exchange rate risk for Canadian investors.
        • Dividend vs. Growth Stocks – Covered call strategies perform better in sideways or slightly rising markets rather than high-growth environments.
        • Options Market Trends – The effectiveness of covered calls depends on market volatility and options pricing.
        • Corporate Earnings Strength – Consistent earnings from Dow companies support both dividend payments and call premiums.
        • Yield vs. Total Return Trade-off – Higher yields may come at the cost of lower upside in strong bull markets.
        • Capped Upside Potential – Covered call strategies limit gains in a strong market rally.
        • Market Sensitivity – If Dow stocks fall sharply, the extra income from covered calls may not offset losses.
        • Interest Rate Impact – Rising rates may challenge income-generating strategies, affecting investor demand.

        The most established and liquid Dow ETF

        SPDR Dow Jones Industrial Average ETF Trust (DIA)

        DIA is the flagship Dow Jones ETF, directly tracking the index without currency hedging. As one of the largest and most liquid ETFs globally, it offers straightforward access to 30 of the most significant U.S. companies, making it a core holding for investors seeking Dow exposure.

        • Highly Liquid and Established – DIA has deep liquidity, making it easy to trade with tight spreads.
        • Unhedged U.S. Dollar Exposure – Canadian investors get direct exposure to USD movements, which can be beneficial in certain economic conditions.
        • Reliable Long-Term Performance – The Dow’s history of stability and steady growth makes it a safe option for core portfolios.
        • Dividend Yield from Blue-Chip Stocks – Includes many companies with long-term dividend growth records.
        • Minimal Tracking Error – As a long-standing index ETF, DIA closely follows the Dow Jones with high accuracy.
        • Strength of the U.S. Economy – The Dow’s performance is closely tied to American economic growth.
        • Federal Reserve Policy – Interest rate changes directly impact financial and industrial components.
        • Global Market Positioning – Large multinational Dow companies rely on international trade and demand.
        • Cyclical Sector Performance – The Dow includes industrials and financials, which perform well in economic upswings.
        • Currency Risk for Canadian Investors – Unhedged exposure to USD means currency fluctuations impact returns.
        • Sector Bias – Dow Jones weighting can shift performance compared to broader market indices.
        • Potential Underperformance vs. S&P 500 – The Dow’s narrower scope may lag behind tech-heavy indices in strong bull markets.

        Overall, there aren’t many methods of gaining exposure, but these are 3 solid ones

        BMO is an outstanding fund provider. I often look to it when thinking of a niche ETF I’d like to own. They have a covered call and non-covered call variant, which adds even more possibilities for Canadians looking for exposure to the Dow.

        In terms of SPDR, it is one of the global leaders when it comes to Dow Jones ETFs, and if you are looking to buy in USD, you can’t really go wrong here. It all depends on your personal preference and your long-term goals.

        With buying SPDR’s ETF, the accuracy of your returns may vary, as an investor’s shares in this ETF are not only exposed to movements of the Dow Jones, but currency fluctuations as well.

        Just announced: Free ETF study

        To give you a taste of what kind of research and opinions are available in my monthly ETF Insights newsletter I am releasing a game changing study I completed for my newsletter.
        ​
        In this study I scrutinize a very popular ETF strategy and investigate the ETFs it involves.
        ​
        This sample newsletter is completely free, no-BS. Just enter your email below and click the button and I will send the sample newsletter direct to your inbox.

          We respect your privacy. Unsubscribe at any time.