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Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
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The iShares Core Dividend Growth ETF (DGRO - Free Report) was launched on 06/10/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock. DGRO has been able to amass assets over $29.75 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. DGRO, before fees and expenses, seeks to match the performance of the Morningstar US Dividend Growth Index.
The Morningstar US Dividend Growth Index is composed of U.S. equities with a history of consistently growing dividends.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.08% for DGRO, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.21%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 18.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 3.11% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Apple Inc (AAPL - Free Report) .
Its top 10 holdings account for approximately 26.59% of DGRO's total assets under management.
Performance and Risk
So far this year, DGRO has added about 15.69%, and is up roughly 21.01% in the last one year (as of 08/30/2024). During this past 52-week period, the fund has traded between $47.36 and $61.66.
DGRO has a beta of 0.88 and standard deviation of 14.61% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 416 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core Dividend Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI EAFE Growth ETF (EFG - Free Report) tracks MSCI EAFE Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares MSCI EAFE Growth ETF has $15.83 billion in assets, Vanguard Dividend Appreciation ETF has $84.06 billion. EFG has an expense ratio of 0.36% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
The iShares Core Dividend Growth ETF (DGRO - Free Report) was launched on 06/10/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock. DGRO has been able to amass assets over $29.75 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. DGRO, before fees and expenses, seeks to match the performance of the Morningstar US Dividend Growth Index.
The Morningstar US Dividend Growth Index is composed of U.S. equities with a history of consistently growing dividends.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.08% for DGRO, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.21%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 18.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 3.11% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Apple Inc (AAPL - Free Report) .
Its top 10 holdings account for approximately 26.59% of DGRO's total assets under management.
Performance and Risk
So far this year, DGRO has added about 15.69%, and is up roughly 21.01% in the last one year (as of 08/30/2024). During this past 52-week period, the fund has traded between $47.36 and $61.66.
DGRO has a beta of 0.88 and standard deviation of 14.61% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 416 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core Dividend Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI EAFE Growth ETF (EFG - Free Report) tracks MSCI EAFE Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares MSCI EAFE Growth ETF has $15.83 billion in assets, Vanguard Dividend Appreciation ETF has $84.06 billion. EFG has an expense ratio of 0.36% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.