The iShares Core Dividend Growth ETF (DGRO) and the Vanguard Dividend Appreciation ETF (VIG) are both interesting ETFs. DGRO tracks Morningstar US Dividend Growth Index and VIG tracks S&P U.S. Dividend Growers Index. So, what’s the difference between DGRO vs VIG? And which fund is better?
DGRO vs VIG: The expense ratio of DGRO is 0.08% and VIG is 0.06%. DGRO’s biggest holding is Microsoft Corp and VIG’s biggest holding is Microsoft Corp. Overall, DGRO has provided -0.49% Lower returns than VIG over the past ten years.In this article, we’ll compare DGRO vs VIG. We’ll look at holdings and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss DGRO’s and VIG’s industry exposure, risk metrics, fund composition and examine how these affect their overall returns.
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Summary DGRO vs VIG
VIG vs DGRO Table
|Name||iShares Core Dividend Growth ETF||Vanguard Dividend Appreciation ETF|
|Category||Large Value||Large Blend|
The iShares Core Dividend Growth ETF (DGRO) is a Morningstar US Dividend Growth Index fund that is issued by iShares. It currently has $22.57B total assets under management and has yielded an average annual return of 11.67% over the past 10 years. The fund has a dividend yield of 2.45% with an expense ratio of 0.08%.
The Vanguard Dividend Appreciation ETF (VIG) is a S&P U.S. Dividend Growers Index that is issued by Vanguard. It currently has $77.43B total assets under management and has yielded an average annual return of 12.16% over the past 10 years. The fund has a dividend yield of 1.98% with an expense ratio of 0.06%.
DGRO’s dividend yield is Higher than that of VIG (2.45% vs 1.98%). Also, DGRO yielded on average -0.49% Lower per year over the past decade (11.67% vs 12.16%). The expense ratio of DGRO is 0.02% percentage points Higher than VIG’s (0.08% vs 0.06%).
Fund Composition DGRO vs VIG
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Industry Exposure Table vs DGRO
The iShares Core Dividend Growth ETF (DGRO) has the most exposure to the Healthcare sector at 19.34%. This is followed by Technology and Financial Services at 18.31% and 17.64% respectively. Real Estate (1.61%), Communication Services (2.15%), and Basic Materials (2.29%) only make up 6.05% of the fund’s total assets.
DGRO’s middle weighted sectors is made up with moderate exposure to Consumer Cyclical, Utilities, Energy, Industrials, and Consumer Defensive stocks at 5.96%, 6.55%, 6.73%, 10.51%, and 10.58%.
The Vanguard Dividend Appreciation ETF (VIG) has the most exposure to the Technology sector at 0.2266. This is followed by Financial Services and Healthcare at 0.1761 and 0.1605 respectively. Real Estate (0.0125), Communication Services (0.0226), and Utilities (0.0311) only make up 0.0662 of the fund’s total assets.
VIG’s middle weighted sectors is made up with moderate exposure to Energy, Basic Materials, Consumer Cyclical, Consumer Defensive, and Industrials stocks at 0.0317, 0.0399, 0.0736, 10.51%, and 10.58%.
DGRO is 3.29% More exposed to the Healthcare sector than VIG (19.34% vs 16.05%). DGRO’s exposure to Technology and Financial Services stocks is -4.35% Less and 0.03% More respectively (18.31% vs. 22.66%) and (17.64% vs. 17.61%).
In total, DGRO’s bottom three industries, Basic Materials, Communication Services, and Real Estate also make up -0.57% Lower of the fund’s holdings compared to VIG’s bottom three industries. (6.05% vs. 0.0662).
Holdings iShares Core Dividend Growth ETF (DGRO)
|Johnson & Johnson||2.95%|
|JPMorgan Chase & Co||2.85%|
|Exxon Mobil Corp||2.75%|
|Procter & Gamble Co||2.21%|
DGRO’s Top Holdings are Microsoft Corp, Apple Inc, Johnson & Johnson, JPMorgan Chase & Co, and Exxon Mobil Corp at 3.91%, 3.41%, 2.95%, 2.85%, and 2.75%.
Chevron Corp (2.45%), AbbVie Inc (2.38%), and Broadcom Inc (2.35%) have a slightly smaller but still significant weight. Procter & Gamble Co and Pfizer Inc are also represented in the DGRO’s holdings at 2.21% and 2.15%.
Holdings Vanguard Dividend Appreciation ETF (VIG)
|UnitedHealth Group Inc||0.0333|
|Exxon Mobil Corp||0.0307|
|Johnson & Johnson||0.0296|
|JPMorgan Chase & Co||0.0291|
|Visa Inc Class A||0.0251|
|Procter & Gamble Co||0.0247|
|Mastercard Inc Class A||0.0226|
DGRO’s Top Holdings are Microsoft Corp, Apple Inc, UnitedHealth Group Inc, Exxon Mobil Corp, and Johnson & Johnson at 0.0513, 0.046, 0.0333, 0.0307, and 0.0296.
JPMorgan Chase & Co (0.0291), Visa Inc Class A (0.0251), and Procter & Gamble Co (0.0247) have a slightly smaller but still significant weight. Broadcom Inc and Mastercard Inc Class A are also represented in the ’s holdings at 0.0239 and 0.0226.
Risk Analysis DGRO vs VIG
The iShares Core Dividend Growth ETF has a Standard Deviation of 16.33 with a Alpha of 0.47 and a Treynor Ratio of 12.07. Its Sharpe Ratio is 0.67 while DGRO’s Beta is 0.85. Furthermore, the fund has a Mean Return of 1.04 and a R-squared of 87.38.
The VIG has a R-squared of 89.72 with a Mean Return of 1 and a Standard Deviation of 16.24. Its Sharpe Ratio is 0.65 while VIG’s Alpha is -0.061. Furthermore, the fund has a Beta of 0.86 and a Treynor Ratio of 11.41.
Performance DGRO vs VIG
Annual Returns DGRO vs VIG
DGRO had its best year in 2019 with an annual return of 29.88%. DGRO’s worst year over the past decade yielded -7.90% and occurred in 2022. In most years the iShares Core Dividend Growth ETF provided moderate returns such as in 2021, 2017, and 2016 where annual returns amounted to 28.78%, 21.77%, and 12.17% respectively.
The year 2019 was the strongest year for VIG, returning 0.2962 on an annual basis. The poorest year for VIG in the last ten years was 2022, with a yield of -0.0981. Most years the Vanguard Dividend Appreciation ETF has given investors modest returns, such as in 2013, 2021, and 2017, when gains were 37.70%, 17.56%, and 16.26% respectively.
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Performance Comparison DGRO vs VIG
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in DGRO would have resulted in a final balance of $22,047.73. This is a profit of $12,047.73 over 10 years and amounts to a compound annual growth rate (CAGR) of 9.18%.
With a $10,000 investment in VIG, the end total would have been $25,335.90. This equates to a $15,335.90 profit over 10 years and a compound annual growth rate (CAGR) of 10.88%.
VIG’s CAGR is 1.70% Higher than that of DGRO and as a result, would have yielded $3,288.17 More on a $10,000 investment. Thus, VIG Overperformed DGRO by $328.82 annually.