Visa Leading Dow and Financial Services ETF

The Dow Jones Industrial Average got a major boost on Thursday after one of its 30 components reported better than expected earnings and surged to a new all-time high. Visa Inc V the world’s largest credit and debit card company gapped higher and rallied over 10 percent as it blew through the January high of $235.50. The index is a price-weighted index the 23-point rally tin Visa is attributing almost 150 points to the nearly 200 point rally in the index.

Visa posted fourth quarter earnings Wednesday after the bell that beat both top and bottom line estimates. They recorded revenue of $3.23 billion in fourth quarter beating estimates by $40 million and increasing 8.6 percent year over year. Adjusted earnings per share were $2.18, beating estimates of $2.10. Along with an impressive report, Visa also announced that it has authorized a $5 billion share buyback program. For all of fiscal 2014 Visa posted revenue of $12.7 billion an 8 percent increase from 2013.

Highlighted below are two ETFs that are being affected by Visas recent surge.

The iShares U.S. Financial Services ETF IYG tracks 112 investment banks, commercial banks, asset managers, credit card companies, and securities exchanges. The top individual holdings include Wells Fargo & Co WFC at 11.6 percent, J.P Morgan Chase & Co JPM with a 10.4 percent holding, and Bank of America (Corp NYSE: BAC) coming in at 8.3 percent. Visa is the fifth highest weighted company in the ETF at 4.9 percent and the credit card company with the largest allocation. IYG is up 13 percent over the last 12 months and 8 percent over the last six months. It has an expense ratio of 0.43 percent.

The SPDR Dow Jones Industrial Average ETF DIA follows the 30 companies that make up the Dow Jones Industrial Average. This will be the ETF that benefits the most from the recent success of Visa’s stock price. The company is the most heavily weighted holding in the index at 8.1 percent. Followed by Goldman Sachs Inc GS with a 7 percent allocation and IBM Corp IBM at 6.2 percent. DIA is up 10 percent over the last 12 months and 4 percent over the last six months. The index ETF has an expense ratio of 0.17 percent.