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Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
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Making its debut on 06/10/2014, smart beta exchange traded fund iShares Core Dividend Growth ETF (DGRO - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $21.02 billion, which makes 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for DGRO are 0.08%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.97%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 20.70% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.24% of total assets, followed by Apple Inc (AAPL - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 26.53% of total assets under management.
Performance and Risk
The ETF has gained about 21.93% and is up roughly 31.32% so far this year and in the past one year (as of 10/26/2021), respectively. DGRO has traded between $38.76 and $53.11 during this last 52-week period.
DGRO has a beta of 0.95 and standard deviation of 23.02% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 393 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 $12.64 billion in assets, Vanguard Dividend Appreciation ETF has $65.06 billion. EFG has an expense ratio of 0.39% 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?
Making its debut on 06/10/2014, smart beta exchange traded fund iShares Core Dividend Growth ETF (DGRO - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $21.02 billion, which makes 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for DGRO are 0.08%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.97%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 20.70% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.24% of total assets, followed by Apple Inc (AAPL - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 26.53% of total assets under management.
Performance and Risk
The ETF has gained about 21.93% and is up roughly 31.32% so far this year and in the past one year (as of 10/26/2021), respectively. DGRO has traded between $38.76 and $53.11 during this last 52-week period.
DGRO has a beta of 0.95 and standard deviation of 23.02% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 393 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 $12.64 billion in assets, Vanguard Dividend Appreciation ETF has $65.06 billion. EFG has an expense ratio of 0.39% 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.