The iShares Core Dividend Growth ETF (DGRO) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. DGRO is a iShares Large Value fund and IUSB is a iShares N/A fund. So, what’s the difference between DGRO and IUSB? And which fund is better?
The expense ratio of DGRO is 0.02 percentage points higher than IUSB’s (0.08% vs. 0.06%). DGRO also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, DGRO has provided higher returns than IUSB over the past 6 years.
In this article, we’ll compare DGRO vs. IUSB. We’ll look at holdings and portfolio growth, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss DGRO’s and IUSB’s risk metrics, performance, and annual returns and examine how these affect their overall returns.
Summary
| DGRO | IUSB | |
| Name | iShares Core Dividend Growth ETF | iShares Core Total USD Bond Market ETF |
| Category | Large Value | N/A |
| Issuer | iShares | iShares |
| AUM | 20B | 14.49B |
| Avg. Return | 12.46% | 4.13% |
| Div. Yield | 2.04% | 2.1% |
| Expense Ratio | 0.08% | 0.06% |
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 Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
DGRO’s dividend yield is 0.06% lower than that of IUSB (2.04% vs. 2.1%). Also, DGRO yielded on average 8.33% more per year over the past decade (12.46% vs. 4.13%). The expense ratio of DGRO is 0.02 percentage points higher than IUSB’s (0.08% vs. 0.06%).
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Fund Composition
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%.
| IUSB Bond Sectors | Weight |
| AAA | 58.32% |
| BBB | 16.98% |
| A | 12.27% |
| BB | 4.33% |
| AA | 3.36% |
| B | 2.8% |
| Others | 1.01% |
| Below B | 0.92% |
| US Government | 0.0% |
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
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Risk Analysis
| DGRO | IUSB | |
| Mean Return | 0 | 0 |
| R-squared | 0 | 0 |
| Std. Deviation | 0 | 0 |
| Alpha | 0 | 0 |
| Beta | 0 | 0 |
| Sharpe Ratio | 0 | 0 |
| Treynor Ratio | 0 | 0 |
The iShares Core Dividend Growth ETF (DGRO) has a Mean Return of 0 with a Alpha of 0 and a Treynor Ratio of 0. Its Beta is 0 while DGRO’s Sharpe Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.
The iShares Core Total USD Bond Market ETF (IUSB) has a Alpha of 0 with a R-squared of 0 and a Beta of 0. Its Treynor Ratio is 0 while IUSB’s Sharpe Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Standard Deviation of 0.
DGRO’s Mean Return is 0.00 points lower than that of IUSB and its R-squared is 0.00 points lower. With a Standard Deviation of 0, DGRO is slightly less volatile than IUSB. The Alpha and Beta of DGRO are 0.00 points lower and 0.00 points lower than IUSB’s Alpha and Beta.
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Performance
Annual Returns
| Year | DGRO | IUSB |
| 2020 | 9.47% | 7.59% |
| 2019 | 30.02% | 9.26% |
| 2018 | -2.24% | -0.38% |
| 2017 | 22.84% | 4.06% |
| 2016 | 15.27% | 3.78% |
| 2015 | -0.62% | 0.46% |
| 2014 | 0.0% | 0.0% |
| 2013 | 0.0% | 0.0% |
| 2012 | 0.0% | 0.0% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 0.0% |
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 IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| DGRO | $10,000 | $19,580 | 12.46% |
| IUSB | $10,000 | $12,704 | 4.13% |
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 IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
DGRO’s CAGR is 8.33 percentage points higher than that of IUSB and as a result, would have yielded $6,876 more on a $10,000 investment. Thus, DGRO outperformed IUSB by 8.33% annually.
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