DIA's Price-Weighting System Favors Financials Over Tech
Investors in the SPDR Dow Jones Industrial Average ETF (DIA) might be surprised to learn that Goldman Sachs holds a larger weight than Microsoft, despite the tech giant's significantly higher market capitalization.
The reason for this discrepancy lies in the way DIA tracks the Dow Jones Industrial Average, which is price-weighted. This means that stocks with higher dollar prices per share receive a larger weight in the index, regardless of their revenue, profit, or market cap.
As of September 24, 2026, Goldman Sachs closed at $923.99, while Microsoft closed at $497.15. This price gap is what gives Goldman a bigger slice of investors' money in DIA.
The effect of this price weighting can be seen in the fund's sector distortions. Because high-priced financial names like Goldman and others sit near the top, DIA carries a heavier financials weight than a market cap S&P 500 fund does. This means that investors may unintentionally be running a financials-heavy, tech-light portfolio.
For those who want to avoid this price-weighting effect, there are cheaper alternatives available. The Vanguard S&P 500 ETF (VOO), for example, tracks the S&P 500 and has an expense ratio of just 0.03%, compared to DIA's 0.16%.