The iShares Core Dividend Growth ETF (DGRO) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. DGRO is a iShares Large Value fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between DGRO and EFV? And which fund is better?
The expense ratio of DGRO is 0.31 percentage points lower than EFV’s (0.08% vs. 0.39%). DGRO also has a higher exposure to the technology sector and a lower standard deviation. Overall, DGRO has provided higher returns than EFV over the past 6 years.
In this article, we’ll compare DGRO vs. EFV. We’ll look at portfolio growth and performance, as well as at their fund composition and annual returns. Moreover, I’ll also discuss DGRO’s and EFV’s industry exposure, holdings, and risk metrics and examine how these affect their overall returns.
Summary
| DGRO | EFV | |
| Name | iShares Core Dividend Growth ETF | iShares MSCI EAFE Value ETF |
| Category | Large Value | Foreign Large Value |
| Issuer | iShares | iShares |
| AUM | 20B | 14.37B |
| Avg. Return | 12.46% | 3.99% |
| Div. Yield | 2.04% | 2.94% |
| Expense Ratio | 0.08% | 0.39% |
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 EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
DGRO’s dividend yield is 0.90% lower than that of EFV (2.04% vs. 2.94%). Also, DGRO yielded on average 8.46% more per year over the past decade (12.46% vs. 3.99%). The expense ratio of DGRO is 0.31 percentage points lower than EFV’s (0.08% vs. 0.39%).
Fund Composition
Industry Exposure
| DGRO | EFV | |
| Technology | 18.98% | 2.98% |
| Industrials | 12.52% | 11.6% |
| Energy | 0.11% | 6.6% |
| Communication Services | 4.53% | 6.46% |
| Utilities | 7.34% | 6.14% |
| Healthcare | 17.55% | 9.19% |
| Consumer Defensive | 10.24% | 6.82% |
| Real Estate | 0.0% | 5.06% |
| Financial Services | 18.47% | 26.55% |
| Consumer Cyclical | 7.42% | 9.0% |
| Basic Materials | 2.83% | 9.59% |
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 EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
DGRO is 16.00% more exposed to the Technology sector than EFV (18.98% vs 2.98%). DGRO’s exposure to Financial Services and Healthcare stocks is 8.08% lower and 8.36% higher respectively (18.47% vs. 26.55% and 17.55% vs. 9.19%). In total, Energy, Basic Materials, and Communication Services also make up 15.18% less of the fund’s holdings compared to EFV (7.47% vs. 22.65%).
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%.
| EFV Holdings | Weight |
| Novartis AG | 2.41% |
| Toyota Motor Corp | 2.21% |
| Commonwealth Bank of Australia | 1.59% |
| Siemens AG | 1.45% |
| Sanofi SA | 1.42% |
| HSBC Holdings PLC | 1.4% |
| TotalEnergies SE | 1.35% |
| Allianz SE | 1.23% |
| GlaxoSmithKline PLC | 1.18% |
| Rio Tinto PLC | 1.1% |
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
Risk Analysis
| DGRO | EFV | |
| Mean Return | 0 | 0.42 |
| R-squared | 0 | 92.15 |
| Std. Deviation | 0 | 16.53 |
| Alpha | 0 | -1.77 |
| Beta | 0 | 1.05 |
| Sharpe Ratio | 0 | 0.26 |
| Treynor Ratio | 0 | 2.92 |
The iShares Core Dividend Growth ETF (DGRO) has a Sharpe Ratio 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 Beta of 0 and a Mean Return of 0.
The iShares MSCI EAFE Value ETF (EFV) has a R-squared of 92.15 with a Beta of 1.05 and a Sharpe Ratio of 0.26. Its Standard Deviation is 16.53 while EFV’s Mean Return is 0.42. Furthermore, the fund has a Treynor Ratio of 2.92 and a Alpha of -1.77.
DGRO’s Mean Return is 0.42 points lower than that of EFV and its R-squared is 92.15 points lower. With a Standard Deviation of 0, DGRO is slightly less volatile than EFV. The Alpha and Beta of DGRO are 1.77 points higher and 1.05 points lower than EFV’s Alpha and Beta.
Performance
Annual Returns
| Year | DGRO | EFV |
| 2020 | 9.47% | -2.78% |
| 2019 | 30.02% | 15.97% |
| 2018 | -2.24% | -14.88% |
| 2017 | 22.84% | 21.22% |
| 2016 | 15.27% | 4.87% |
| 2015 | -0.62% | -5.89% |
| 2014 | 0.0% | -5.65% |
| 2013 | 0.0% | 22.61% |
| 2012 | 0.0% | 17.52% |
| 2011 | 0.0% | -12.24% |
| 2010 | 0.0% | 3.18% |
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 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| DGRO | $10,000 | $19,580 | 12.46% |
| EFV | $10,000 | $11,481 | 3.99% |
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 EFV, the end total would have been $11,481. This equates to a $1,481 profit over 6 years and a compound annual growth rate (CAGR) of 3.99%.
DGRO’s CAGR is 8.46 percentage points higher than that of EFV and as a result, would have yielded $8,099 more on a $10,000 investment. Thus, DGRO outperformed EFV by 8.46% annually.
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