DGRO vs. IWP: What’s The Difference?

The iShares Core Dividend Growth ETF (DGRO) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. DGRO is a iShares Large Value fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between DGRO and IWP? And which fund is better?

The expense ratio of DGRO is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%). DGRO also has a lower exposure to the technology sector and a lower standard deviation. Overall, DGRO has provided lower returns than IWP over the past 6 years.

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

Summary

DGRO IWP
Name iShares Core Dividend Growth ETF iShares Russell Mid-Cap Growth ETF
Category Large Value Mid-Cap Growth
Issuer iShares iShares
AUM 20B 15.7B
Avg. Return 12.46% 16.75%
Div. Yield 2.04% 0.26%
Expense Ratio 0.08% 0.24%

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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

DGRO’s dividend yield is 1.78% higher than that of IWP (2.04% vs. 0.26%). Also, DGRO yielded on average 4.29% less per year over the past decade (12.46% vs. 16.75%). The expense ratio of DGRO is 0.16 percentage points lower than IWP’s (0.08% vs. 0.24%).

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Fund Composition

Industry Exposure

DGRO vs. IWP - Industry Exposure

DGRO IWP
Technology 18.98% 33.88%
Industrials 12.52% 14.09%
Energy 0.11% 1.51%
Communication Services 4.53% 6.32%
Utilities 7.34% 0.16%
Healthcare 17.55% 16.79%
Consumer Defensive 10.24% 2.32%
Real Estate 0.0% 2.46%
Financial Services 18.47% 4.52%
Consumer Cyclical 7.42% 16.09%
Basic Materials 2.83% 1.86%

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 Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

DGRO is 14.90% less exposed to the Technology sector than IWP (18.98% vs 33.88%). DGRO’s exposure to Financial Services and Healthcare stocks is 13.95% higher and 0.76% higher respectively (18.47% vs. 4.52% and 17.55% vs. 16.79%). In total, Energy, Basic Materials, and Communication Services also make up 2.22% less of the fund’s holdings compared to IWP (7.47% vs. 9.69%).

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%.

IWP - Holdings

IWP Holdings Weight
IDEXX Laboratories Inc 1.3%
DocuSign Inc 1.3%
Roku Inc Class A 1.29%
Match Group Inc 1.06%
Chipotle Mexican Grill Inc 1.06%
Pinterest Inc 1.05%
Veeva Systems Inc Class A 1.04%
Palantir Technologies Inc Ordinary Shares – Class A 1.04%
Lululemon Athletica Inc 1.01%
DexCom Inc 1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

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Risk Analysis

DGRO IWP
Mean Return 0 1.27
R-squared 0 87.01
Std. Deviation 0 16.05
Alpha 0 -1.03
Beta 0 1.1
Sharpe Ratio 0 0.91
Treynor Ratio 0 12.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a R-squared of 87.01 with a Sharpe Ratio of 0.91 and a Standard Deviation of 16.05. Its Beta is 1.1 while IWP’s Treynor Ratio is 12.98. Furthermore, the fund has a Mean Return of 1.27 and a Alpha of -1.03.

DGRO’s Mean Return is 1.27 points lower than that of IWP and its R-squared is 87.01 points lower. With a Standard Deviation of 0, DGRO is slightly less volatile than IWP. The Alpha and Beta of DGRO are 1.03 points higher and 1.10 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

DGRO vs. IWP - Annual Returns

Year DGRO IWP
2020 9.47% 35.29%
2019 30.02% 35.14%
2018 -2.24% -4.95%
2017 22.84% 24.98%
2016 15.27% 7.15%
2015 -0.62% -0.39%
2014 0.0% 11.68%
2013 0.0% 35.44%
2012 0.0% 15.62%
2011 0.0% -1.82%
2010 0.0% 26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

DGRO vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DGRO $10,000 $19,580 12.46%
IWP $10,000 $23,181 16.75%

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 IWP, the end total would have been $23,181. This equates to a $13,181 profit over 6 years and a compound annual growth rate (CAGR) of 16.75%.

DGRO’s CAGR is 4.29 percentage points lower than that of IWP and as a result, would have yielded $3,601 less on a $10,000 investment. Thus, DGRO performed worse than IWP by 4.29% annually.


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