The iShares Russell 1000 Value ETF (IWD) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and DGRO is a iShares Large Value fund. So, what’s the difference between IWD and DGRO? And which fund is better?
The expense ratio of IWD is 0.11 percentage points higher than DGRO’s (0.19% vs. 0.08%). IWD also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided lower returns than DGRO over the past ten years.
In this article, we’ll compare IWD vs. DGRO. We’ll look at performance and fund composition, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IWD’s and DGRO’s industry exposure, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| IWD | DGRO | |
| Name | iShares Russell 1000 Value ETF | iShares Core Dividend Growth ETF |
| Category | Large Value | Large Value |
| Issuer | iShares | iShares |
| AUM | 54.1B | 20B |
| Avg. Return | 11.40% | 12.46% |
| Div. Yield | 1.57% | 2.04% |
| Expense Ratio | 0.19% | 0.08% |
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
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%.
IWD’s dividend yield is 0.47% lower than that of DGRO (1.57% vs. 2.04%). Also, IWD yielded on average 1.06% less per year over the past decade (11.40% vs. 12.46%). The expense ratio of IWD is 0.11 percentage points higher than DGRO’s (0.19% vs. 0.08%).
Fund Composition
Industry Exposure
| IWD | DGRO | |
| Technology | 10.28% | 18.98% |
| Industrials | 11.77% | 12.52% |
| Energy | 4.76% | 0.11% |
| Communication Services | 8.67% | 4.53% |
| Utilities | 4.88% | 7.34% |
| Healthcare | 17.78% | 17.55% |
| Consumer Defensive | 7.76% | 10.24% |
| Real Estate | 4.94% | 0.0% |
| Financial Services | 20.43% | 18.47% |
| Consumer Cyclical | 5.62% | 7.42% |
| Basic Materials | 3.1% | 2.83% |
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
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%.
IWD is 1.96% more exposed to the Financial Services sector than DGRO (20.43% vs 18.47%). IWD’s exposure to Healthcare and Industrials stocks is 0.23% higher and 0.75% lower respectively (17.78% vs. 17.55% and 11.77% vs. 12.52%). In total, Energy, Utilities, and Real Estate also make up 7.13% more of the fund’s holdings compared to DGRO (14.58% vs. 7.45%).
Holdings
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
| 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
| IWD | DGRO | |
| Mean Return | 1.03 | 0 |
| R-squared | 92.38 | 0 |
| Std. Deviation | 14.35 | 0 |
| Alpha | -3.23 | 0 |
| Beta | 1.02 | 0 |
| Sharpe Ratio | 0.81 | 0 |
| Treynor Ratio | 11.06 | 0 |
The iShares Russell 1000 Value ETF (IWD) has a Alpha of -3.23 with a R-squared of 92.38 and a Mean Return of 1.03. Its Treynor Ratio is 11.06 while IWD’s Beta is 1.02. Furthermore, the fund has a Standard Deviation of 14.35 and a Sharpe Ratio of 0.81.
The iShares Core Dividend Growth ETF (DGRO) has a Mean Return of 0 with a Alpha of 0 and a R-squared of 0. Its Standard Deviation is 0 while DGRO’s Treynor Ratio is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.
IWD’s Mean Return is 1.03 points higher than that of DGRO and its R-squared is 92.38 points higher. With a Standard Deviation of 14.35, IWD is slightly more volatile than DGRO. The Alpha and Beta of IWD are 3.23 points lower and 1.02 points higher than DGRO’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | DGRO |
| 2020 | 2.67% | 9.47% |
| 2019 | 26.34% | 30.02% |
| 2018 | -8.4% | -2.24% |
| 2017 | 13.47% | 22.84% |
| 2016 | 17.09% | 15.27% |
| 2015 | -3.95% | -0.62% |
| 2014 | 13.21% | 0.0% |
| 2013 | 32.18% | 0.0% |
| 2012 | 17.28% | 0.0% |
| 2011 | 0.21% | 0.0% |
| 2010 | 15.3% | 0.0% |
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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 |
| IWD | $10,000 | $15,162 | 11.40% |
| DGRO | $10,000 | $19,580 | 12.46% |
A $10,000 investment in IWD would have resulted in a final balance of $15,162. This is a profit of $5,162 over 6 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
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%.
IWD’s CAGR is 1.06 percentage points lower than that of DGRO and as a result, would have yielded $4,418 less on a $10,000 investment. Thus, IWD performed worse than DGRO by 1.06% annually.
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