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[Must-Read for New Investors] ETF delivers 137% return over 3 years, with constituent stocks doubling in just 1 year! Check out 2 painless 'small-change' investment strategies now
The recent US stock market has been extremely volatile—a reality many investors have keenly felt. Over the past several months, previously red-hot sectors like semiconductors, AI memory, and storage experienced explosive growth, but have recently undergone significant pullbacks from their highs and sharp volatility. For Hong Kong investors who are busy with work and can’t monitor the market all day, watching these popular tech stocks swing wildly by 5% or even 10% daily can be nerve-wracking—and may leave them unsure how to take their first step into investing.
Faced with current market uncertainty, many readers’ first instinct is to allocate funds into broad-market ETFs tracking major indices, such as the S&P 500 ETF (VOO) or the Nasdaq 100 ETF (QQQ). While this is certainly a solid starting point, in volatile conditions, are there other classic options that offer stronger defense, lower volatility, yet still retain growth potential?
The answer is—the century-old hallmark of the US stock market:Dow Jones Industrial Average (commonly known as the 'Dow')
Why should the Dow be considered for beginner investors?
The Dow Jones Industrial Average includes only 30 carefully selected U.S. blue-chip leaders, with a long history and unique weighting methodology. For investors seeking large-cap 'blue-chip stocks,' it offers three primary advantages:
① Offers a degree of defensiveness
When high-valuation tech stocks 'cool off' or face pressure from valuation corrections, market capital tends to rotate toward traditional economic giants with more stable cash flows and solid earnings support.
Dow components are industry titans across sectors—for example, healthcare leader $UnitedHealth (UNH.US)$, banking giants $JPMorgan (JPM.US)$ and global restaurant titans $McDonald's (MCD.US)$ etc. These companies have demonstrated strong resilience throughout economic cycles. Even amid broader market volatility, they continue to offer investors 'emotional value' through their robust defensive characteristics, helping to balance investors’ portfolios to some extent.
② Perfect blend of tradition and high elasticity: meets investors’ demand for both defensive positioning and high upside potential
Don’t mistakenly assume the Dow Jones is merely a conservative index filled only with 'sunset industries' or 'old-economy stocks.' In fact, the Dow’s components have continually evolved with the times—even quietly integrating the strongest AI technology DNA.
The Dow uses a price-weighted methodology and periodically adjusts its components. At the end of 2024, it underwent a major revision, officially replacing $NVIDIA (NVDA.US)$Intel $Intel (INTC.US)$ with the global AI chip giant. This means today’s Dow includes top-tier tech growth leaders like Microsoft $Microsoft (MSFT.US)$、 $Apple (AAPL.US)$and NVIDIA (NVDA), while still retaining industrial and retail stalwarts with stable businesses like Sherwin-Williams $Sherwin-Williams (SHW.US)$、 $Home Depot (HD.US)$.This unique combination aligns with an asset allocation strategy that blends 'defensive qualities with the high elasticity of tech stocks.'
③ A global upgrade for Hong Kong’s 'income-focused' investors: moving beyond a single market to pursue 'dividend-paying stocks with growth potential'
Many Hong Kong investors traditionally prefer buying local bank stocks, utility stocks (such as power companies), or blue-chip Hong Kong-listed dividend-paying stocks. However, in recent years, weak local asset appreciation has left many stuck in a situation where 'dividends were earned, but share prices declined.'
All 30 companies in the Dow Jones Industrial Average are among the largest U.S.-based multinational corporations with global operations. Compared to single-market local assets, Dow components offer attractive dividend profiles—for example, Chevron has delivered an average dividend yield of 4.6% over the past five years and has raised its dividend for 38 consecutive years, while Coca-Cola has averaged a 3.18% dividend yield over the same period and has increased its dividend for 63 straight years. For income-focused investors seeking inflation-resistant assets, these may represent a globally upgraded alternative.
Digging for Gold Among Dow Components: Top 5 by 250-Day Price Gain Revealed
We specifically analyzed the 250-day price performance of Dow components and discovered an intriguing phenomenon: even Google, a tech giant that has surged more than 100% in recent years, ranks only second on the Dow’s gainers list!
Below are the top five components—see how traditional industrial leaders and tech giants each shine in their own way:
◦ Company Overview: As the world’s largest manufacturer of construction and mining equipment, as well as diesel and natural gas engines, this 'industrial behemoth' has benefited from the recent global infrastructure boom, strong order backlogs, and exceptional pricing power. Its stock has delivered remarkable returns—even outperforming many leading tech stocks.
◦ Company Overview: Global leader in internet advertising and search engines. Powered by robust AI integration, rapid growth in Google Cloud, and a highly profitable advertising and subscription ecosystem, its share price has doubled over the past 250 trading days.
◦ Company Overview: Global leader in networking infrastructure and cybersecurity. Driven by enterprise network upgrades, expansion of cloud infrastructure, and surging demand for cybersecurity, Cisco has delivered impressive cumulative gains, supported by strong cash flows and its indispensable position in the industry.
◦ Company Overview: A top-tier Wall Street investment bank and asset management giant. With the recent recovery in capital markets, a rebound in M&A and financing activities, and strong inflows into its wealth management business, Goldman Sachs' stock has shone brightly, becoming the leader in the financial sector of the Dow Jones Index.
◦ Company Overview: The global consumer electronics powerhouse. Its hardware ecosystem boasts exceptional stickiness, its high-margin services segment continues to grow steadily, and anticipated new 'Apple Intelligence' AI applications are expected to further support this trillion-dollar blue-chip stock’s consistent upward trajectory.
Opportunities and Practical Strategies: How Can Beginners 'Safely Get On Board'?
For Hong Kong-based novice investors who lack time to monitor markets constantly but are bullish on large-cap U.S. blue chips, consider the following two easy ways to gain exposure:
– Low barrier to entry (the 'lazy copy-paste' method): Invest in a Dow Jones ETF
You don’t need to spend time analyzing financial reports of all 30 individual stocks—simply buy one ETF that tracks the Dow Jones Index to instantly gain exposure to these 30 world-leading companies.
◦ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$— A classic choice with a long history and excellent liquidity in the U.S. equity market;
Moreover, if you believe the broader market correction is nearly over or that Dow Jones blue chips are poised for a strong rebound—and you’d like to amplify returns with relatively less capital—you may consider the following two 'bullish' instruments:
◦ $ProShares UltraPro Dow30 ETF (UDOW.US)$ — This is the only classic ETF in the market that tracks 3x the daily return of the Dow Jones. As of the close on July 20, 2026, its three-year total return stood at 96.51%.
◦ $Proshares Ultra Dow30 (DDM.US)$ : DDM is suitable for moderately aggressive investors who find the 1x index (DIA) insufficiently exciting but are concerned that 3x leveraged products are too volatile. As of the close on July 20, 2026, its three-year total return was 137.48%.
Screening and sorting logic: As of the U.S. market close on July 20, 2026, bullish Dow Jones ETFs available on the Futubull app, ranked by trading volume from highest to lowest.
It should be noted that leveraged ETFs are a double-edged sword. They are best suited for short-term trading during periods of extremely clear market trends or sharp, retaliatory rebounds, and are not appropriate for long-term 'buy and hold' strategies. Additionally, leveraged products (such as UDOW and SDOW) magnify potential gains—and losses—by the same multiple. Investors must assess their risk tolerance carefully and set clear stop-loss levels before entering positions.
– Medium-barrier strategy (handpicked stocks):
If you're not satisfied with merely buying index ETFs and hope to achieve excess returns through 'handpicked individual stocks,' the Dow Jones Industrial Average (DJIA) components could also serve as an excellent 'stock selection pool.'
Screening logic: Futubull app – Dow Jones Industrial Average components, ranked by 250-day price change from highest to lowest, top 10 (TPOP10), as of July 21, 2026.
In addition to the five stocks mentioned above, we’ll now introduce the remaining stocks (for informational purposes only; not investment advice or recommendations):
– 250-day price change: +62.10%
– Company Overview: A global leader among multinational pharmaceutical giants, dedicated to the research and development of prescription drugs, vaccines, biologics, and animal health products. Its flagship products include the blockbuster cancer drug Keytruda (‘K drug’) and a wide range of human vaccines.
– 250-day price change: +55.17%
– Company Overview: One of the world’s largest and most diversified healthcare companies. Following the spin-off of its consumer health business, it now focuses exclusively on two high-growth segments: 'Innovative Pharmaceuticals' and 'MedTech' (including surgical equipment, orthopedics, and ophthalmic devices).
– 250-day price change: +53.41%
– Company Overview: The largest U.S. healthcare insurer and medical services giant by both market capitalization and revenue. The company operates primarily through two segments: UnitedHealthcare (providing health insurance and benefits) and Optum (offering healthcare data analytics, pharmacy management, and outpatient care services).
– 250-day price change: +42.21%
– Company Overview: One of the largest property and casualty insurance companies in the United States, primarily offering diversified insurance coverage and risk management services—including auto, homeowners, and commercial property insurance—to individuals, businesses, and government agencies.
– 250-day price change: +32.05%
– Company Overview: One of the world's largest multinational energy and oil giants. Its operations span upstream activities such as oil and natural gas exploration and production, as well as midstream and downstream operations including pipeline transportation, refining, chemicals manufacturing, and retail. In recent years, it has also gradually expanded into new energy sectors like geothermal and biofuels.
⚠️ Potential Risk Notice and Compliance Statement
Although Dow Jones component stocks are known for their 'defensive' characteristics, Hong Kong investors should still keep one key consideration in mind when investing in U.S. equities:
– U.S. dividend tax withholding: The U.S. government imposes a 30% withholding taxon dividend income paid to non-U.S. residents, which differs from direct investments in Hong Kong-listed stocks (most of which are exempt from dividend tax, while some red-chip stocks are taxed at around 10%). Therefore, when investing in Dow Jones components or related ETFs, we should focus on the total return—comprising both 'capital gains (share price appreciation) + dividends'—rather than solely chasing high dividend yields.
– Beware of 'earning dividends but losing on price': Understand the concept of total return
We must clearly recognize that the returns from dividend-paying stocks actually consist of two parts:one is the dividend yield, and the other is capital appreciation yield. 。
– 'Price performance' represents the asset’s intrinsic value growth over time;
– 'Dividend income' refers to the profits distributed by the company to its shareholders.
In practice, investorsshould never focus solely on dividend payouts while ignoring the stock's price performance. If a stock offers an apparently attractive dividend yield but the company's fundamentals deteriorate and its share price declines, investors can easily end up in a painful situation where 'dividends are gained but capital is lost' ('gaining dividends but losing on price') due to different investment approaches or market volatility.
Therefore, when investing in Dow Jones Industrial Average component stocks, we should place greater emphasis on the 'total return'—comprising both 'capital gains (share price appreciation) + dividend income'—rather than dividend yield alone. This is a critical point to keep in mind when constructing your portfolio.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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