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Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
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Launched on 06/10/2014, the iShares Core Dividend Growth ETF (DGRO - Free Report) is a smart beta exchange traded fund offering 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $22.22 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the Morningstar US Dividend Growth Index before fees and expenses.
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.
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 2.17%.
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.
DGRO's heaviest allocation is in the Healthcare sector, which is about 18.90% of the portfolio. Its Financials and Information Technology round out the top three.
Taking into account individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 2.85% of the fund's total assets, followed by Procter & Gamble (PG - Free Report) and Apple Inc (AAPL - Free Report) .
DGRO's top 10 holdings account for about 24.83% of its total assets under management.
Performance and Risk
So far this year, DGRO has lost about -10.96%, and is down about -0.31% in the last one year (as of 05/12/2022). During this past 52-week period, the fund has traded between $48.93 and $56.06.
DGRO has a beta of 0.92 and standard deviation of 23.12% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 422 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.
ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) tracks S&P 500 DividendAristocrats Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. ProShares S&P 500 Dividend Aristocrats ETF has $9.80 billion in assets, Vanguard Dividend Appreciation ETF has $60.78 billion. NOBL has an expense ratio of 0.35% 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?
Launched on 06/10/2014, the iShares Core Dividend Growth ETF (DGRO - Free Report) is a smart beta exchange traded fund offering 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $22.22 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the Morningstar US Dividend Growth Index before fees and expenses.
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.
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 2.17%.
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.
DGRO's heaviest allocation is in the Healthcare sector, which is about 18.90% of the portfolio. Its Financials and Information Technology round out the top three.
Taking into account individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 2.85% of the fund's total assets, followed by Procter & Gamble (PG - Free Report) and Apple Inc (AAPL - Free Report) .
DGRO's top 10 holdings account for about 24.83% of its total assets under management.
Performance and Risk
So far this year, DGRO has lost about -10.96%, and is down about -0.31% in the last one year (as of 05/12/2022). During this past 52-week period, the fund has traded between $48.93 and $56.06.
DGRO has a beta of 0.92 and standard deviation of 23.12% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 422 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.
ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) tracks S&P 500 DividendAristocrats Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. ProShares S&P 500 Dividend Aristocrats ETF has $9.80 billion in assets, Vanguard Dividend Appreciation ETF has $60.78 billion. NOBL has an expense ratio of 0.35% 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.