We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares Core Dividend Growth ETF (DGRO) a Strong ETF Right Now?
Read MoreHide Full Article
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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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
DGRO is managed by Blackrock, and this fund has amassed over $25.83 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.
The fund has a 12-month trailing dividend yield of 2.37%.
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.
For DGRO, it has heaviest allocation in the Financials sector --about 20.60% of the portfolio --while Healthcare and Information Technology round out the top three.
When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.26% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Apple Inc (AAPL - Free Report) .
Its top 10 holdings account for approximately 25.23% of DGRO's total assets under management.
Performance and Risk
So far this year, DGRO has added roughly 3.05%, and is up about 10.89% in the last one year (as of 02/19/2024). During this past 52-week period, the fund has traded between $47.36 and $55.59.
The fund has a beta of 0.90 and standard deviation of 14.84% for the trailing three-year period, which makes DGRO a medium risk choice in this particular space. With about 434 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.
WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) tracks WisdomTree U.S. Quality Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. WisdomTree U.S. Quality Dividend Growth ETF has $11.92 billion in assets, Vanguard Dividend Appreciation ETF has $75.25 billion. DGRW has an expense ratio of 0.28% 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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
DGRO is managed by Blackrock, and this fund has amassed over $25.83 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.
The fund has a 12-month trailing dividend yield of 2.37%.
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.
For DGRO, it has heaviest allocation in the Financials sector --about 20.60% of the portfolio --while Healthcare and Information Technology round out the top three.
When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.26% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Apple Inc (AAPL - Free Report) .
Its top 10 holdings account for approximately 25.23% of DGRO's total assets under management.
Performance and Risk
So far this year, DGRO has added roughly 3.05%, and is up about 10.89% in the last one year (as of 02/19/2024). During this past 52-week period, the fund has traded between $47.36 and $55.59.
The fund has a beta of 0.90 and standard deviation of 14.84% for the trailing three-year period, which makes DGRO a medium risk choice in this particular space. With about 434 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.
WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) tracks WisdomTree U.S. Quality Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. WisdomTree U.S. Quality Dividend Growth ETF has $11.92 billion in assets, Vanguard Dividend Appreciation ETF has $75.25 billion. DGRW has an expense ratio of 0.28% 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.