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IJR vs. DGRO: What’s The Difference?

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

The expense ratio of IJR is 0.02 percentage points lower than DGRO’s (0.06% vs. 0.08%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than DGRO over the past ten years.

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

Introduction To Mutual Funds
Introduction To Mutual Funds
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Summary

IJRDGRO
NameiShares Core S&P Small-Cap ETFiShares Core Dividend Growth ETF
CategorySmall BlendLarge Value
IssueriSharesiShares
AUM68.64B20B
Avg. Return13.97%12.46%
Div. Yield0.96%2.04%
Expense Ratio0.06%0.08%

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 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%.

IJR’s dividend yield is 1.08% lower than that of DGRO (0.96% vs. 2.04%). Also, IJR yielded on average 1.51% more per year over the past decade (13.97% vs. 12.46%). The expense ratio of IJR is 0.02 percentage points lower than DGRO’s (0.06% vs. 0.08%).

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Fund Composition

Industry Exposure

IJR vs. DGRO - Industry Exposure

IJRDGRO
Technology14.32%18.98%
Industrials17.31%12.52%
Energy4.0%0.11%
Communication Services2.59%4.53%
Utilities1.8%7.34%
Healthcare11.55%17.55%
Consumer Defensive4.01%10.24%
Real Estate9.55%0.0%
Financial Services15.91%18.47%
Consumer Cyclical13.61%7.42%
Basic Materials5.34%2.83%

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

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%.

IJR is 4.79% more exposed to the Industrials sector than DGRO (17.31% vs 12.52%). IJR’s exposure to Financial Services and Technology stocks is 2.56% lower and 4.66% lower respectively (15.91% vs. 18.47% and 14.32% vs. 18.98%). In total, Communication Services, Energy, and Consumer Defensive also make up 4.28% less of the fund’s holdings compared to DGRO (10.60% vs. 14.88%).

Holdings

IJR - Holdings

IJR HoldingsWeight
BlackRock Cash Funds Treasury SL Agency1.08%
GameStop Corp Class A0.86%
Omnicell Inc0.61%
Stamps.com Inc0.58%
Saia Inc0.57%
Power Integrations Inc0.57%
Exponent Inc0.54%
NeoGenomics Inc0.53%
Chart Industries Inc0.53%
Macy’s Inc0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

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

IJRDGRO
Mean Return1.210
R-squared76.030
Std. Deviation18.680
Alpha-3.70
Beta1.20
Sharpe Ratio0.740
Treynor Ratio10.770

The iShares Core S&P Small-Cap ETF (IJR) has a Sharpe Ratio of 0.74 with a Beta of 1.2 and a Standard Deviation of 18.68. Its Alpha is -3.7 while IJR’s Treynor Ratio is 10.77. Furthermore, the fund has a Mean Return of 1.21 and a R-squared of 76.03.

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

IJR’s Mean Return is 1.21 points higher than that of DGRO and its R-squared is 76.03 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than DGRO. The Alpha and Beta of IJR are 3.70 points lower and 1.20 points higher than DGRO’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. DGRO - Annual Returns

YearIJRDGRO
202011.24%9.47%
201922.79%30.02%
2018-8.43%-2.24%
201713.2%22.84%
201626.49%15.27%
2015-2.0%-0.62%
20145.67%0.0%
201341.36%0.0%
201216.28%0.0%
20110.9%0.0%
201026.14%0.0%

IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% 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

IJR vs. DGRO - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IJR$10,000$17,55113.97%
DGRO$10,000$19,58012.46%

A $10,000 investment in IJR would have resulted in a final balance of $17,551. This is a profit of $7,551 over 6 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

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%.

IJR’s CAGR is 1.51 percentage points higher than that of DGRO and as a result, would have yielded $2,029 less on a $10,000 investment. Thus, IJR outperformed DGRO by 1.51% annually.


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