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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
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 sponsored by Blackrock. It has amassed assets over $22.14 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 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.
This ETF has heaviest allocation in the Healthcare sector - about 19.90% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 2.85% of total assets, followed by Procter & Gamble (PG - Free Report) and Apple Inc (AAPL - Free Report) .
The top 10 holdings account for about 24.83% of total assets under management.
Performance and Risk
The ETF has lost about -12.67% and is down about -3.81% so far this year and in the past one year (as of 07/12/2022), respectively. DGRO has traded between $45.84 and $56.06 during this last 52-week period.
DGRO has a beta of 0.91 and standard deviation of 23.64% 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 $9.69 billion in assets, Vanguard Dividend Appreciation ETF has $60.33 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?
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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
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 sponsored by Blackrock. It has amassed assets over $22.14 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 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.
This ETF has heaviest allocation in the Healthcare sector - about 19.90% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 2.85% of total assets, followed by Procter & Gamble (PG - Free Report) and Apple Inc (AAPL - Free Report) .
The top 10 holdings account for about 24.83% of total assets under management.
Performance and Risk
The ETF has lost about -12.67% and is down about -3.81% so far this year and in the past one year (as of 07/12/2022), respectively. DGRO has traded between $45.84 and $56.06 during this last 52-week period.
DGRO has a beta of 0.91 and standard deviation of 23.64% 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 $9.69 billion in assets, Vanguard Dividend Appreciation ETF has $60.33 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.