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DGRO vs. SDY: What’s The Difference?

The iShares Core Dividend Growth ETF (DGRO) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. DGRO is a iShares Large Value fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between DGRO and SDY? And which fund is better?

The expense ratio of DGRO is 0.27 percentage points lower than SDY’s (0.08% vs. 0.35%). DGRO also has a higher exposure to the technology sector and a lower standard deviation. Overall, DGRO has provided higher returns than SDY over the past 6 years.

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

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Summary

DGROSDY
NameiShares Core Dividend Growth ETFSPDR S&P Dividend ETF
CategoryLarge ValueLarge Value
IssueriSharesSPDR State Street Global Advisors
AUM20B19.67B
Avg. Return12.46%12.44%
Div. Yield2.04%2.65%
Expense Ratio0.08%0.35%

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 SPDR S&P Dividend ETF (SDY) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 19.67B total assets under management and has yielded an average annual return of 12.44% over the past 10 years. The fund has a dividend yield of 2.65% with an expense ratio of 0.35%.

DGRO’s dividend yield is 0.61% lower than that of SDY (2.04% vs. 2.65%). Also, DGRO yielded on average 0.02% more per year over the past decade (12.46% vs. 12.44%). The expense ratio of DGRO is 0.27 percentage points lower than SDY’s (0.08% vs. 0.35%).

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Fund Composition

Industry Exposure

DGRO vs. SDY - Industry Exposure

DGROSDY
Technology18.98%2.0%
Industrials12.52%15.89%
Energy0.11%5.95%
Communication Services4.53%4.64%
Utilities7.34%12.14%
Healthcare17.55%7.35%
Consumer Defensive10.24%14.01%
Real Estate0.0%6.57%
Financial Services18.47%16.32%
Consumer Cyclical7.42%8.68%
Basic Materials2.83%6.45%

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 SPDR S&P Dividend ETF (SDY) has the most exposure to the Financial Services sector at 16.32%. This is followed by Industrials and Consumer Defensive at 15.89% and 14.01% respectively. Communication Services (4.64%), Energy (5.95%), and Basic Materials (6.45%) only make up 17.04% of the fund’s total assets.

SDY’s mid-section with moderate exposure is comprised of Real Estate, Healthcare, Consumer Cyclical, Utilities, and Consumer Defensive stocks at 6.57%, 7.35%, 8.68%, 12.14%, and 14.01%.

DGRO is 16.98% more exposed to the Technology sector than SDY (18.98% vs 2.0%). DGRO’s exposure to Financial Services and Healthcare stocks is 2.15% higher and 10.20% higher respectively (18.47% vs. 16.32% and 17.55% vs. 7.35%). In total, Energy, Basic Materials, and Communication Services also make up 9.57% less of the fund’s holdings compared to SDY (7.47% vs. 17.04%).

Holdings

DGRO - Holdings

DGRO HoldingsWeight
Microsoft Corp3.29%
Apple Inc3.26%
Pfizer Inc2.89%
Johnson & Johnson2.87%
Procter & Gamble Co2.79%
Verizon Communications Inc2.68%
JPMorgan Chase & Co2.57%
The Home Depot Inc2.35%
Merck & Co Inc2.11%
Cisco Systems Inc1.98%

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%.

SDY - Holdings

SDY HoldingsWeight
Exxon Mobil Corp2.81%
AT&T Inc2.5%
South Jersey Industries Inc2.22%
Chevron Corp2.02%
International Business Machines Corp2.0%
AbbVie Inc1.93%
National Retail Properties Inc1.86%
Federal Realty Investment Trust1.77%
Realty Income Corp1.7%
Old Republic International Corp1.65%

SDY’s Top Holdings are Exxon Mobil Corp, AT&T Inc, South Jersey Industries Inc, Chevron Corp, and International Business Machines Corp at 2.81%, 2.5%, 2.22%, 2.02%, and 2.0%.

AbbVie Inc (1.93%), National Retail Properties Inc (1.86%), and Federal Realty Investment Trust (1.77%) have a slightly smaller but still significant weight. Realty Income Corp and Old Republic International Corp are also represented in the SDY’s holdings at 1.7% and 1.65%.

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Risk Analysis

DGROSDY
Mean Return01.07
R-squared083.62
Std. Deviation012.9
Alpha0-0.1
Beta00.87
Sharpe Ratio00.95
Treynor Ratio013.94

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

The SPDR S&P Dividend ETF (SDY) has a Sharpe Ratio of 0.95 with a Alpha of -0.1 and a Treynor Ratio of 13.94. Its R-squared is 83.62 while SDY’s Beta is 0.87. Furthermore, the fund has a Standard Deviation of 12.9 and a Mean Return of 1.07.

DGRO’s Mean Return is 1.07 points lower than that of SDY and its R-squared is 83.62 points lower. With a Standard Deviation of 0, DGRO is slightly less volatile than SDY. The Alpha and Beta of DGRO are 0.10 points higher and 0.87 points lower than SDY’s Alpha and Beta.

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Performance

Annual Returns

DGRO vs. SDY - Annual Returns

YearDGROSDY
20209.47%1.78%
201930.02%23.37%
2018-2.24%-2.73%
201722.84%15.84%
201615.27%20.17%
2015-0.62%-0.7%
20140.0%13.8%
20130.0%30.09%
20120.0%11.51%
20110.0%7.28%
20100.0%16.41%

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 SDY, returning 30.09% on an annual basis. The poorest year for SDY in the last ten years was 2018, with a yield of -2.73%. Most years the SPDR S&P Dividend ETF has given investors modest returns, such as in 2012, 2014, and 2017, when gains were 11.51%, 13.8%, and 15.84% respectively.

Portfolio Growth

DGRO vs. SDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
DGRO$10,000$19,58012.46%
SDY$10,000$16,88312.44%

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 SDY, the end total would have been $16,883. This equates to a $6,883 profit over 6 years and a compound annual growth rate (CAGR) of 12.44%.

DGRO’s CAGR is 0.02 percentage points higher than that of SDY and as a result, would have yielded $2,697 more on a $10,000 investment. Thus, DGRO outperformed SDY by 0.02% annually.


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