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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) made its debut on 06/10/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

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.

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.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $34.62 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

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.

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 2.03%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Financials sector - about 20.1% of the portfolio. Information Technology and Healthcare round out the top three.

When you look at individual holdings, Apple Inc (AAPL) accounts for about 3.1% of the fund's total assets, followed by Microsoft Corp (MSFT) and Johnson & Johnson (JNJ).

DGRO's top 10 holdings account for about 26.79% of its total assets under management.

Performance and Risk

Year-to-date, the iShares Core Dividend Growth ETF has added roughly 12.62% so far, and was up about 8.28% over the last 12 months (as of 11/11/2025). DGRO has traded between $55.22 $69.17 in this past 52-week period.

The ETF has a beta of 0.84 and standard deviation of 12.27% for the trailing three-year period, making it a medium risk choice in the space. With about 405 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) tracks WisdomTree U.S. Quality Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. WisdomTree U.S. Quality Dividend Growth ETF has $16.03 billion in assets, Vanguard Dividend Appreciation ETF has $98.85 billion. DGRW has an expense ratio of 0.28% and VIG changes 0.05%.

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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