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Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the iShares Core Dividend Growth ETF (DGRO - Free Report) is a smart beta exchange traded fund launched on 06/10/2014.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
Because the fund has amassed over $25.04 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. DGRO is managed by Blackrock. Before fees and expenses, DGRO 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.08% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.28%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Financials sector - about 18.20% of the portfolio. Healthcare and Information Technology round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.09% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Performance and Risk
The ETF has added about 2.26% so far this year and is down about -5.53% in the last one year (as of 01/18/2023). In the past 52-week period, it has traded between $44.47 and $54.67.
The fund has a beta of 0.91 and standard deviation of 24.53% for the trailing three-year period, which makes DGRO a medium risk choice in this particular space. With about 452 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 $11.50 billion in assets, Vanguard Dividend Appreciation ETF has $66.22 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?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the iShares Core Dividend Growth ETF (DGRO - Free Report) is a smart beta exchange traded fund launched on 06/10/2014.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
Because the fund has amassed over $25.04 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. DGRO is managed by Blackrock. Before fees and expenses, DGRO 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.08% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.28%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Financials sector - about 18.20% of the portfolio. Healthcare and Information Technology round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.09% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Performance and Risk
The ETF has added about 2.26% so far this year and is down about -5.53% in the last one year (as of 01/18/2023). In the past 52-week period, it has traded between $44.47 and $54.67.
The fund has a beta of 0.91 and standard deviation of 24.53% for the trailing three-year period, which makes DGRO a medium risk choice in this particular space. With about 452 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 $11.50 billion in assets, Vanguard Dividend Appreciation ETF has $66.22 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.