The iShares Core Dividend Growth ETF (DGRO) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. DGRO is a iShares Large Value fund and ACWI is a iShares N/A fund. So, what’s the difference between DGRO and ACWI? And which fund is better?
The expense ratio of DGRO is 0.24 percentage points lower than ACWI’s (0.08% vs. 0.32%). DGRO also has a lower exposure to the technology sector and a lower standard deviation. Overall, DGRO has provided higher returns than ACWI over the past 6 years.
In this article, we’ll compare DGRO vs. ACWI. We’ll look at risk metrics and holdings, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss DGRO’s and ACWI’s industry exposure, annual returns, and performance and examine how these affect their overall returns.
Summary
| DGRO | ACWI | |
| Name | iShares Core Dividend Growth ETF | iShares MSCI ACWI ETF |
| Category | Large Value | N/A |
| Issuer | iShares | iShares |
| AUM | 20B | 16.85B |
| Avg. Return | 12.46% | 10.21% |
| Div. Yield | 2.04% | 1.39% |
| Expense Ratio | 0.08% | 0.32% |
The iShares Core Dividend Growth ETF (DGRO) is a Large Value fund that is issued by iShares. It currently has 20B total assets under management and has yielded an average annual return of 12.46% over the past 10 years. The fund has a dividend yield of 2.04% with an expense ratio of 0.08%.
The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.
DGRO’s dividend yield is 0.65% higher than that of ACWI (2.04% vs. 1.39%). Also, DGRO yielded on average 2.24% more per year over the past decade (12.46% vs. 10.21%). The expense ratio of DGRO is 0.24 percentage points lower than ACWI’s (0.08% vs. 0.32%).
Fund Composition
Industry Exposure
| DGRO | ACWI | |
| Technology | 18.98% | 20.41% |
| Industrials | 12.52% | 9.65% |
| Energy | 0.11% | 3.48% |
| Communication Services | 4.53% | 9.87% |
| Utilities | 7.34% | 2.61% |
| Healthcare | 17.55% | 11.74% |
| Consumer Defensive | 10.24% | 7.15% |
| Real Estate | 0.0% | 2.75% |
| Financial Services | 18.47% | 15.58% |
| Consumer Cyclical | 7.42% | 12.01% |
| Basic Materials | 2.83% | 4.73% |
The iShares Core Dividend Growth ETF (DGRO) has the most exposure to the Technology sector at 18.98%. This is followed by Financial Services and Healthcare at 18.47% and 17.55% respectively. Energy (0.11%), Basic Materials (2.83%), and Communication Services (4.53%) only make up 7.47% of the fund’s total assets.
DGRO’s mid-section with moderate exposure is comprised of Utilities, Consumer Cyclical, Consumer Defensive, Industrials, and Healthcare stocks at 7.34%, 7.42%, 10.24%, 12.52%, and 17.55%.
The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.
ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.
DGRO is 1.43% less exposed to the Technology sector than ACWI (18.98% vs 20.41%). DGRO’s exposure to Financial Services and Healthcare stocks is 2.89% higher and 5.81% higher respectively (18.47% vs. 15.58% and 17.55% vs. 11.74%). In total, Energy, Basic Materials, and Communication Services also make up 10.61% less of the fund’s holdings compared to ACWI (7.47% vs. 18.08%).
Holdings
| DGRO Holdings | Weight |
| Microsoft Corp | 3.29% |
| Apple Inc | 3.26% |
| Pfizer Inc | 2.89% |
| Johnson & Johnson | 2.87% |
| Procter & Gamble Co | 2.79% |
| Verizon Communications Inc | 2.68% |
| JPMorgan Chase & Co | 2.57% |
| The Home Depot Inc | 2.35% |
| Merck & Co Inc | 2.11% |
| Cisco Systems Inc | 1.98% |
DGRO’s Top Holdings are Microsoft Corp, Apple Inc, Pfizer Inc, Johnson & Johnson, and Procter & Gamble Co at 3.29%, 3.26%, 2.89%, 2.87%, and 2.79%.
Verizon Communications Inc (2.68%), JPMorgan Chase & Co (2.57%), and The Home Depot Inc (2.35%) have a slightly smaller but still significant weight. Merck & Co Inc and Cisco Systems Inc are also represented in the DGRO’s holdings at 2.11% and 1.98%.
| ACWI Holdings | Weight |
| Apple Inc | 3.44% |
| Microsoft Corp | 2.91% |
| Amazon.com Inc | 2.21% |
| Facebook Inc A | 1.25% |
| Alphabet Inc Class C | 1.12% |
| Alphabet Inc A | 1.09% |
| Taiwan Semiconductor Manufacturing Co Ltd | 0.79% |
| Tesla Inc | 0.78% |
| NVIDIA Corp | 0.74% |
| JPMorgan Chase & Co | 0.71% |
ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.
Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.
Risk Analysis
| DGRO | ACWI | |
| Mean Return | 0 | 0.89 |
| R-squared | 0 | 99.96 |
| Std. Deviation | 0 | 14.05 |
| Alpha | 0 | 0.15 |
| Beta | 0 | 1 |
| Sharpe Ratio | 0 | 0.71 |
| Treynor Ratio | 0 | 9.45 |
The iShares Core Dividend Growth ETF (DGRO) has a Standard Deviation of 0 with a R-squared of 0 and a Beta of 0. Its Alpha is 0 while DGRO’s Mean Return is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.
The iShares MSCI ACWI ETF (ACWI) has a Beta of 1 with a Sharpe Ratio of 0.71 and a R-squared of 99.96. Its Treynor Ratio is 9.45 while ACWI’s Standard Deviation is 14.05. Furthermore, the fund has a Mean Return of 0.89 and a Alpha of 0.15.
DGRO’s Mean Return is 0.89 points lower than that of ACWI and its R-squared is 99.96 points lower. With a Standard Deviation of 0, DGRO is slightly less volatile than ACWI. The Alpha and Beta of DGRO are 0.15 points lower and 1.00 points lower than ACWI’s Alpha and Beta.
Performance
Annual Returns
| Year | DGRO | ACWI |
| 2020 | 9.47% | 16.38% |
| 2019 | 30.02% | 26.7% |
| 2018 | -2.24% | -9.15% |
| 2017 | 22.84% | 24.35% |
| 2016 | 15.27% | 8.22% |
| 2015 | -0.62% | -2.39% |
| 2014 | 0.0% | 4.64% |
| 2013 | 0.0% | 22.91% |
| 2012 | 0.0% | 15.99% |
| 2011 | 0.0% | -7.6% |
| 2010 | 0.0% | 12.31% |
DGRO had its best year in 2019 with an annual return of 30.02%. DGRO’s worst year over the past decade yielded -2.24% and occurred in 2018. In most years the iShares Core Dividend Growth ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.
The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| DGRO | $10,000 | $19,580 | 12.46% |
| ACWI | $10,000 | $17,596 | 10.21% |
A $10,000 investment in DGRO would have resulted in a final balance of $19,580. This is a profit of $9,580 over 6 years and amounts to a compound annual growth rate (CAGR) of 12.46%.
With a $10,000 investment in ACWI, the end total would have been $17,596. This equates to a $7,596 profit over 6 years and a compound annual growth rate (CAGR) of 10.21%.
DGRO’s CAGR is 2.24 percentage points higher than that of ACWI and as a result, would have yielded $1,984 more on a $10,000 investment. Thus, DGRO outperformed ACWI by 2.24% annually.
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