Better Blue-Chip ETF: Vanguard's VOO vs. State Street's DIA
Key Points
DIA comes with a higher expense ratio but a slightly higher yield than VOO.
VOO has delivered a stronger five-year return and tracks a far broader slice of the U.S. market.
DIA’s holdings are heavily tilted toward financials and industrials, unlike VOO’s tech-dominated portfolio.
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The key differences between the Vanguard S&P 500 ETF (NYSEMKT:VOO) and the SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT:DIA) are cost, breadth, and sector mix, with VOO offering lower expenses and broader diversification, while DIA is more concentrated and leans into financials and industrials.
This comparison looks at two blue-chip U.S. equity ETFs: VOO, which tracks the S&P 500, and DIA, which follows the Dow Jones Industrial Average. While both aim to capture large-cap U.S. stock performance, their approaches, sector exposures, and costs differ in ways that may appeal to different investor preferences.
Snapshot (cost & size)
| Metric | VOO | DIA |
|---|---|---|
| Issuer | Vanguard | SPDR |
| Expense ratio | 0.03% | 0.16% |
| 1-yr return (as of 2026-01-09) | 19.6% | 18.1% |
| Dividend yield | 1.1% | 1.4% |
| AUM | $1.5 trillion | $44.4 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.
VOO is more affordable, with a 0.03% expense ratio compared to DIA’s 0.16%. DIA offers a slightly higher dividend yield, which may appeal to investors prioritizing income.
Performance & risk comparison
| Metric | VOO | DIA |
|---|---|---|
| Max drawdown (5 y) | -24.52% | -20.76% |
| Growth of $1,000 over 5 years | $1,834 | $1,596 |
What's inside
DIA is built to track the Dow Jones Industrial Average, a price-weighted index representing 30 of the largest and most established U.S. companies. The fund has a pronounced tilt toward financial services (28%), followed by technology (20%) and industrials (15%). Its top holdings include Goldman Sachs Group Inc., Caterpillar Inc. and Microsoft Corp. With only 30 holdings and a fund age of 28 years, DIA is highly concentrated, which can make its performance diverge from broader market benchmarks.
By contrast, VOO tracks the S&P 500, offering exposure to 505 companies and a much wider cross-section of the U.S. economy. The portfolio is technology-heavy (35%), with significant allocations to financial services and communication services. Its largest positions are Nvidia Corp., Apple Inc., and Microsoft Corp., reflecting the S&P 500’s current tech dominance.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The Vanguard S&P 500 ETF (VOO) and SPDR Dow Jones Industrial Average ETF Trust (DIA) both track blue-chip companies, but they possess key differences. Because it tracks the Dow Jones Industrial Average, DIA contains only 30 stocks. This can lead to poor diversification and concentration of risk, especially since its holdings are price-weighted, which means higher-priced stocks have a disproportionately larger impact on the ETF’s performance.
However, DIA pays a higher dividend than VOO. Not only that, the dividend is paid out monthly, while VOO’s dividend is paid quarterly.
VOO offers far greater diversification than DIA, since it tracks the S&P 500. As a result of its larger number of holdings, VOO’s assets under management is far greater than DIA’s, leading to greater liquidity.
While VOO pays a lower and less-frequent dividend, its very low expense ratio compared to DIA means investors are saving on costs. VOO is well-suited for investors who want broad market exposure and who seek to “set it and forget it,” buying and holding the ETF for the long haul. Meanwhile, DIA is great for investors who want monthly passive income.
Glossary
ETF: An exchange-traded fund that holds a basket of assets and trades like a stock.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Diversification: Spreading investments across many securities or sectors to reduce the impact of any single holding.
Sector exposure: The percentage of a fund’s assets invested in specific industries, like technology or financials.
Dividend yield: Annual dividends per share divided by the current share price, shown as a percentage.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specific period.
Beta: A measure of an investment’s volatility compared with the overall market, typically the S&P 500.
AUM (Assets under management): The total market value of all assets managed by a fund.
Price-weighted index: An index where companies with higher share prices have greater influence on performance.
Large-cap: Companies with relatively large market values, generally among the biggest in the stock market.
Concentrated portfolio: A fund holding relatively few securities, increasing the impact of each holding on performance.
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Robert Izquierdo has positions in Apple, Caterpillar, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Apple, Goldman Sachs Group, Microsoft, Nvidia, and Vanguard S&P 500 ETF. 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.
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