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IAU vs. DGRO: What’s The Difference?

The iShares Gold Trust (IAU) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. IAU is a iShares N/A fund and DGRO is a iShares Large Value fund. So, what’s the difference between IAU and DGRO? And which fund is better?

The expense ratio of IAU is 0.17 percentage points higher than DGRO’s (0.25% vs. 0.08%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than DGRO over the past 6 years.

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

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Summary

IAUDGRO
NameiShares Gold TrustiShares Core Dividend Growth ETF
CategoryN/ALarge Value
IssueriSharesiShares
AUM28.61B20B
Avg. Return6.03%12.46%
Div. Yield0.0%2.04%
Expense Ratio0.25%0.08%

The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

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%.

IAU’s dividend yield is 2.04% lower than that of DGRO (0.0% vs. 2.04%). Also, IAU yielded on average 6.42% less per year over the past decade (6.03% vs. 12.46%). The expense ratio of IAU is 0.17 percentage points higher than DGRO’s (0.25% vs. 0.08%).

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Fund Composition

Industry Exposure

IAU vs. DGRO - Industry Exposure

IAUDGRO
Technology0.0%18.98%
Industrials0.0%12.52%
Energy0.0%0.11%
Communication Services0.0%4.53%
Utilities0.0%7.34%
Healthcare0.0%17.55%
Consumer Defensive0.0%10.24%
Real Estate0.0%0.0%
Financial Services0.0%18.47%
Consumer Cyclical0.0%7.42%
Basic Materials0.0%2.83%

The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

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%.

IAU is 18.98% less exposed to the Technology sector than DGRO (0.0% vs 18.98%). IAU’s exposure to Industrials and Energy stocks is 12.52% lower and 0.11% lower respectively (0.0% vs. 12.52% and 0.0% vs. 0.11%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 25.89% less of the fund’s holdings compared to DGRO (0.00% vs. 25.89%).

Holdings

IAU - Holdings

IAU HoldingsWeight
Gold100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

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%.

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Risk Analysis

IAUDGRO
Mean Return0.230
R-squared16.030
Std. Deviation16.970
Alpha4.160
Beta0.480
Sharpe Ratio0.130
Treynor Ratio1.50

The iShares Gold Trust (IAU) has a Sharpe Ratio of 0.13 with a Standard Deviation of 16.97 and a Alpha of 4.16. Its Treynor Ratio is 1.5 while IAU’s R-squared is 16.03. Furthermore, the fund has a Mean Return of 0.23 and a Beta of 0.48.

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

IAU’s Mean Return is 0.23 points higher than that of DGRO and its R-squared is 16.03 points higher. With a Standard Deviation of 16.97, IAU is slightly more volatile than DGRO. The Alpha and Beta of IAU are 4.16 points higher and 0.48 points higher than DGRO’s Alpha and Beta.

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Performance

Annual Returns

IAU vs. DGRO - Annual Returns

YearIAUDGRO
202023.86%9.47%
201918.54%30.02%
2018-1.39%-2.24%
201711.58%22.84%
20168.85%15.27%
2015-11.65%-0.62%
2014-0.44%0.0%
2013-27.96%0.0%
20128.37%0.0%
20118.66%0.0%
201027.93%0.0%

IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% respectively.

The year 2019 was the strongest year for DGRO, returning 30.02% on an annual basis. The poorest year for DGRO in the last ten years was 2018, with a yield of -2.24%. Most years the iShares Core Dividend Growth ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

IAU vs. DGRO - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IAU$10,000$15,5356.03%
DGRO$10,000$19,58012.46%

A $10,000 investment in IAU would have resulted in a final balance of $15,535. This is a profit of $5,535 over 6 years and amounts to a compound annual growth rate (CAGR) of 6.03%.

With a $10,000 investment in DGRO, the end total would have been $19,580. This equates to a $9,580 profit over 6 years and a compound annual growth rate (CAGR) of 12.46%.

IAU’s CAGR is 6.42 percentage points lower than that of DGRO and as a result, would have yielded $4,045 less on a $10,000 investment. Thus, IAU performed worse than DGRO by 6.42% annually.


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