DGRO vs. BIV: What’s The Difference?

The iShares Core Dividend Growth ETF (DGRO) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. DGRO is a iShares Large Value fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between DGRO and BIV? And which fund is better?

The expense ratio of DGRO is 0.03 percentage points higher than BIV’s (0.08% vs. 0.05%). DGRO also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, DGRO has provided higher returns than BIV over the past 6 years.

In this article, we’ll compare DGRO vs. BIV. We’ll look at holdings and fund composition, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss DGRO’s and BIV’s performance, risk metrics, and annual returns and examine how these affect their overall returns.

Summary

DGRO BIV
Name iShares Core Dividend Growth ETF Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category Large Value Intermediate-Term Bond
Issuer iShares Vanguard
AUM 20B 39.05B
Avg. Return 12.46% 5.31%
Div. Yield 2.04% 2.06%
Expense Ratio 0.08% 0.05%

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 Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

DGRO’s dividend yield is 0.02% lower than that of BIV (2.04% vs. 2.06%). Also, DGRO yielded on average 7.14% more per year over the past decade (12.46% vs. 5.31%). The expense ratio of DGRO is 0.03 percentage points higher than BIV’s (0.08% vs. 0.05%).

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Fund Composition

Holdings

DGRO - 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%.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

DGRO BIV
Mean Return 0 0.35
R-squared 0 95.12
Std. Deviation 0 4.09
Alpha 0 -0.07
Beta 0 1.33
Sharpe Ratio 0 0.89
Treynor Ratio 0 2.72

The iShares Core Dividend Growth ETF (DGRO) has a Beta of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Alpha is 0 while DGRO’s Treynor Ratio is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Mean Return of 0.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Alpha of -0.07 with a Treynor Ratio of 2.72 and a Mean Return of 0.35. Its Beta is 1.33 while BIV’s Sharpe Ratio is 0.89. Furthermore, the fund has a Standard Deviation of 4.09 and a R-squared of 95.12.

DGRO’s Mean Return is 0.35 points lower than that of BIV and its R-squared is 95.12 points lower. With a Standard Deviation of 0, DGRO is slightly less volatile than BIV. The Alpha and Beta of DGRO are 0.07 points higher and 1.33 points lower than BIV’s Alpha and Beta.

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Performance

Annual Returns

DGRO vs. BIV - Annual Returns

Year DGRO BIV
2020 9.47% 9.71%
2019 30.02% 10.19%
2018 -2.24% -0.09%
2017 22.84% 3.8%
2016 15.27% 2.86%
2015 -0.62% 1.23%
2014 0.0% 7.0%
2013 0.0% -3.44%
2012 0.0% 7.02%
2011 0.0% 10.62%
2010 0.0% 9.55%

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 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

DGRO vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DGRO $10,000 $19,580 12.46%
BIV $10,000 $13,054 5.31%

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 BIV, the end total would have been $13,054. This equates to a $3,054 profit over 6 years and a compound annual growth rate (CAGR) of 5.31%.

DGRO’s CAGR is 7.14 percentage points higher than that of BIV and as a result, would have yielded $6,526 more on a $10,000 investment. Thus, DGRO outperformed BIV by 7.14% annually.


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