The iShares S&P 500 Growth ETF (IVW) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and DGRO is a iShares Large Value fund. So, what’s the difference between IVW and DGRO? And which fund is better?
The expense ratio of IVW is 0.10 percentage points higher than DGRO’s (0.18% vs. 0.08%). IVW also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVW has provided higher returns than DGRO over the past ten years.
In this article, we’ll compare IVW vs. DGRO. We’ll look at holdings and industry exposure, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss IVW’s and DGRO’s portfolio growth, performance, and annual returns and examine how these affect their overall returns.
Summary
| IVW | DGRO | |
| Name | iShares S&P 500 Growth ETF | iShares Core Dividend Growth ETF |
| Category | Large Growth | Large Value |
| Issuer | iShares | iShares |
| AUM | 35.72B | 20B |
| Avg. Return | 16.74% | 12.46% |
| Div. Yield | 0.61% | 2.04% |
| Expense Ratio | 0.18% | 0.08% |
The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.
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%.
IVW’s dividend yield is 1.43% lower than that of DGRO (0.61% vs. 2.04%). Also, IVW yielded on average 4.28% more per year over the past decade (16.74% vs. 12.46%). The expense ratio of IVW is 0.10 percentage points higher than DGRO’s (0.18% vs. 0.08%).
Fund Composition
Industry Exposure
| IVW | DGRO | |
| Technology | 37.8% | 18.98% |
| Industrials | 5.72% | 12.52% |
| Energy | 0.06% | 0.11% |
| Communication Services | 15.44% | 4.53% |
| Utilities | 0.47% | 7.34% |
| Healthcare | 11.88% | 17.55% |
| Consumer Defensive | 3.84% | 10.24% |
| Real Estate | 1.11% | 0.0% |
| Financial Services | 6.78% | 18.47% |
| Consumer Cyclical | 15.25% | 7.42% |
| Basic Materials | 1.65% | 2.83% |
The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.
IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.
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%.
IVW is 18.82% more exposed to the Technology sector than DGRO (37.8% vs 18.98%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 10.91% higher and 7.83% higher respectively (15.44% vs. 4.53% and 15.25% vs. 7.42%). In total, Utilities, Real Estate, and Basic Materials also make up 6.94% less of the fund’s holdings compared to DGRO (3.23% vs. 10.17%).
Holdings
| IVW Holdings | Weight |
| Apple Inc | 11.46% |
| Microsoft Corp | 10.75% |
| Amazon.com Inc | 7.14% |
| Facebook Inc Class A | 4.28% |
| Alphabet Inc Class A | 4.06% |
| Alphabet Inc Class C | 3.86% |
| Tesla Inc | 2.65% |
| NVIDIA Corp | 2.43% |
| PayPal Holdings Inc | 1.62% |
| Adobe Inc | 1.49% |
IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.
Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.
| 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%.
Risk Analysis
| IVW | DGRO | |
| Mean Return | 1.44 | 0 |
| R-squared | 93.82 | 0 |
| Std. Deviation | 13.77 | 0 |
| Alpha | 2.19 | 0 |
| Beta | 0.98 | 0 |
| Sharpe Ratio | 1.21 | 0 |
| Treynor Ratio | 17.24 | 0 |
The iShares S&P 500 Growth ETF (IVW) has a Mean Return of 1.44 with a Treynor Ratio of 17.24 and a R-squared of 93.82. Its Standard Deviation is 13.77 while IVW’s Alpha is 2.19. Furthermore, the fund has a Beta of 0.98 and a Sharpe Ratio of 1.21.
The iShares Core Dividend Growth ETF (DGRO) has a Treynor Ratio of 0 with a R-squared of 0 and a Mean Return of 0. Its Alpha is 0 while DGRO’s Standard Deviation is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Beta of 0.
IVW’s Mean Return is 1.44 points higher than that of DGRO and its R-squared is 93.82 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than DGRO. The Alpha and Beta of IVW are 2.19 points higher and 0.98 points higher than DGRO’s Alpha and Beta.
Performance
Annual Returns
| Year | IVW | DGRO |
| 2020 | 33.21% | 9.47% |
| 2019 | 30.91% | 30.02% |
| 2018 | -0.17% | -2.24% |
| 2017 | 27.2% | 22.84% |
| 2016 | 6.74% | 15.27% |
| 2015 | 5.33% | -0.62% |
| 2014 | 14.67% | 0.0% |
| 2013 | 32.48% | 0.0% |
| 2012 | 14.39% | 0.0% |
| 2011 | 4.49% | 0.0% |
| 2010 | 14.84% | 0.0% |
IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% 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
| Fund | Initial Balance | Final Balance | CAGR |
| IVW | $10,000 | $24,896 | 16.74% |
| DGRO | $10,000 | $19,580 | 12.46% |
A $10,000 investment in IVW would have resulted in a final balance of $24,896. This is a profit of $14,896 over 6 years and amounts to a compound annual growth rate (CAGR) of 16.74%.
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%.
IVW’s CAGR is 4.28 percentage points higher than that of DGRO and as a result, would have yielded $5,316 more on a $10,000 investment. Thus, IVW outperformed DGRO by 4.28% annually.
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