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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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $22.79 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. DGRO is managed by Blackrock. 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.08%.
DGRO's 12-month trailing dividend yield is 2.58%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 19.60% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Financials and Information Technology round out the top three.
Taking into account individual holdings, Jpmorgan Chase & Co (JPM - Free Report) accounts for about 3.04% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Microsoft Corp (MSFT - Free Report) .
DGRO's top 10 holdings account for about 26.12% of its total assets under management.
Performance and Risk
Year-to-date, the iShares Core Dividend Growth ETF has added about 0.65% so far, and is up about 10.60% over the last 12 months (as of 10/16/2023). DGRO has traded between $45.50 and $53.28 in this past 52-week period.
The ETF has a beta of 0.89 and standard deviation of 15.38% for the trailing three-year period, making it a medium risk choice in the space. With about 433 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 $11.33 billion in assets, Vanguard Dividend Appreciation ETF has $66.43 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?
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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $22.79 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. DGRO is managed by Blackrock. 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.08%.
DGRO's 12-month trailing dividend yield is 2.58%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 19.60% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Financials and Information Technology round out the top three.
Taking into account individual holdings, Jpmorgan Chase & Co (JPM - Free Report) accounts for about 3.04% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Microsoft Corp (MSFT - Free Report) .
DGRO's top 10 holdings account for about 26.12% of its total assets under management.
Performance and Risk
Year-to-date, the iShares Core Dividend Growth ETF has added about 0.65% so far, and is up about 10.60% over the last 12 months (as of 10/16/2023). DGRO has traded between $45.50 and $53.28 in this past 52-week period.
The ETF has a beta of 0.89 and standard deviation of 15.38% for the trailing three-year period, making it a medium risk choice in the space. With about 433 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 $11.33 billion in assets, Vanguard Dividend Appreciation ETF has $66.43 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.