DIA tracks only 30 blue-chip stocks and shows lower volatility and drawdown than IWM’s 1,954-stock small-cap portfolio
IWM delivered a higher 1-year return, but DIA’s yield and risk-adjusted metrics currently look more defensive
DIA’s expense ratio is slightly lower, and its sector tilt is heavier to financials and technology
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SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT:DIA) and iShares Russell 2000 ETF (NYSEMKT:IWM) differ sharply in market coverage, sector exposure, and risk profile, with DIA offering concentrated blue-chip exposure and IWM targeting the broad U.S. small-cap segment.
IWM aims to capture the performance of 1,954 U.S. small-cap stocks, while DIA provides access to just 30 of the largest, most established U.S. companies in the Dow Jones Industrial Average. This comparison looks at cost, returns, risk, and portfolio makeup to help investors decide which approach may fit their goals.
Metric | IWM | DIA |
|---|
Issuer | IShares | SPDR |
Expense ratio | 0.19% | 0.16% |
1-yr return (as of 2026-01-09) | 20.0% | 18.1% |
Dividend yield | 1.0% | 1.4% |
Beta | 1.13 | 0.91 |
AUM | $77.7 billion | $44.6 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
DIA is modestly less expensive than IWM and currently offers a higher dividend yield, which may appeal to those seeking a slightly lower-cost, higher-payout option among major index ETFs.
Metric | IWM | DIA |
|---|
Max drawdown (5 y) | -31.91% | -20.76% |
Growth of $1,000 over 5 years | $1,341 | $1,749 |
DIA tracks the Dow Jones Industrial Average, holding just 30 blue-chip U.S. stocks—making it one of the most concentrated major index ETFs. Its sector exposure leans heavily on financial services (28%), technology (20%), and industrials (15%). The largest positions include Goldman Sachs Group Inc (NYSE:GS), Caterpillar Inc (NYSE:CAT), and Microsoft Corp (NASDAQ:MSFT). With 28 years of history and a focused lineup, DIA may appeal to those seeking established names and lower volatility.
IWM, by contrast, holds roughly 1,950 U.S. small-cap stocks, delivering broad diversification across the market’s smaller companies. Its sector allocation is more balanced, with healthcare (19%), financial services (16%), and technology (16%) as the main weights. Top positions like Bloom Energy Class A Corp (NYSE:BE), Credo Technology Group Holding Ltd (NASDAQ:CRDO), and Kratos Defense And Security Solutions (NASDAQ:KTOS) comprise a much smaller slice of assets, reflecting the ETF’s wide reach.
For more guidance on ETF investing, check out the full guide at this link.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) and iShares Russell 2000 ETF (IWM) are two of the best-known and largest ETFs around. Each fund tracks an iconic stock market index, the Dow Jones Industrial Average and the Russell 2000 index, respectively. So, here’s what retail investors need to know about these two ETFs.
To start, the most significant difference between these two funds is the size and type of their holdings. The DIA holds only 30 stocks, while IWM holds close to 2,000. In addition, the DIA tilts heavily towards large and megacap stocks. Meanwhile, IWM’s extensive portfolio tilts far more towards medium and small caps.
As for the key financial and performance metrics, DIA comes out ahead of IWM. DIA has the lower expense ratio, higher dividend yield, and greater total return over the last five years. What’s more, it also has experienced less volatility, with its max drawdown being -21% as compared to -32% for IWM.
Therefore, many investors may favor DIA over IWM given its combination of positive attributes. However, IWM may still hold appeal for investors that are seeking diversification and greater exposure to small and mid cap stocks.
ETF: Exchange-traded fund that holds a basket of assets and trades on stock exchanges like a stock.
Index ETF: An ETF designed to track the performance of a specific market index, before fees and expenses.
Small-cap: Companies with relatively low market value, typically more volatile and faster-growing than large, established firms.
Blue-chip stocks: Shares of large, established companies with stable earnings and long records of reliability.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends per share divided by the share price, showing income return percentage.
Beta: Measure of an investment’s volatility relative to a benchmark index, often the S&P 500.
AUM (Assets under management): Total market value of assets that a fund or manager oversees.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specific period.
Risk-adjusted metrics: Measures that compare investment returns to the amount of risk taken to achieve them.
Sector exposure: The percentage of a fund’s assets invested in specific industries or sectors.
Diversification: Spreading investments across many securities to reduce the impact of any single holding’s performance.
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Jake Lerch has positions in Caterpillar and iShares Trust – iShares Russell 2000 ETF. The Motley Fool has positions in and recommends Bloom Energy, Goldman Sachs Group, Kratos Defense & Security Solutions, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
DIA vs. IWM: DIA Combines Higher Yield With Lower Cost, While IWM Offers Greater Diversification was originally published by The Motley Fool
