The iShares Russell 1000 ETF (IWB) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between IWB and DGRO? And which fund is better?
The expense ratio of IWB is 0.07 percentage points higher than DGRO’s (0.15% vs. 0.08%). IWB also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWB has provided higher returns than DGRO over the past ten years.
In this article, we’ll compare IWB vs. DGRO. We’ll look at risk metrics and industry exposure, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss IWB’s and DGRO’s fund composition, holdings, and performance and examine how these affect their overall returns.
|Name||iShares Russell 1000 ETF||iShares Core Dividend Growth ETF|
|Category||Large Blend||Large Value|
The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.
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%.
IWB’s dividend yield is 0.90% lower than that of DGRO (1.14% vs. 2.04%). Also, IWB yielded on average 2.18% more per year over the past decade (14.64% vs. 12.46%). The expense ratio of IWB is 0.07 percentage points higher than DGRO’s (0.15% vs. 0.08%).
The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.
IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.
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%.
IWB is 6.35% more exposed to the Technology sector than DGRO (25.33% vs 18.98%). IWB’s exposure to Financial Services and Healthcare stocks is 4.83% lower and 4.20% lower respectively (13.64% vs. 18.47% and 13.35% vs. 17.55%). In total, Utilities, Energy, and Real Estate also make up 0.69% more of the fund’s holdings compared to DGRO (8.14% vs. 7.45%).
|Facebook Inc Class A||2.03%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.82%|
|Berkshire Hathaway Inc Class B||1.24%|
|JPMorgan Chase & Co||1.09%|
IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.
Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.
|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%.
The iShares Russell 1000 ETF (IWB) has a Treynor Ratio of 14.31 with a R-squared of 99.73 and a Alpha of -0.38. Its Sharpe Ratio is 1.05 while IWB’s Mean Return is 1.27. Furthermore, the fund has a Standard Deviation of 13.87 and a Beta of 1.02.
The iShares Core Dividend Growth ETF (DGRO) has a Beta of 0 with a Treynor Ratio of 0 and a Alpha of 0. Its R-squared is 0 while DGRO’s Sharpe Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a Mean Return of 0.
IWB’s Mean Return is 1.27 points higher than that of DGRO and its R-squared is 99.73 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than DGRO. The Alpha and Beta of IWB are 0.38 points lower and 1.02 points higher than DGRO’s Alpha and Beta.
IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWB would have resulted in a final balance of $20,674. This is a profit of $10,674 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.64%.
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%.
IWB’s CAGR is 2.18 percentage points higher than that of DGRO and as a result, would have yielded $1,094 more on a $10,000 investment. Thus, IWB outperformed DGRO by 2.18% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.