The iShares Russell 1000 Growth ETF (IWF) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and DGRO is a iShares Large Value fund. So, what’s the difference between IWF and DGRO? And which fund is better?
The expense ratio of IWF is 0.11 percentage points higher than DGRO’s (0.19% vs. 0.08%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than DGRO over the past ten years.
In this article, we’ll compare IWF vs. DGRO. We’ll look at holdings and annual returns, as well as at their risk metrics and performance. Moreover, I’ll also discuss IWF’s and DGRO’s fund composition, industry exposure, and portfolio growth and examine how these affect their overall returns.
Summary
| IWF | DGRO | |
| Name | iShares Russell 1000 Growth ETF | iShares Core Dividend Growth ETF |
| Category | Large Growth | Large Value |
| Issuer | iShares | iShares |
| AUM | 72.16B | 20B |
| Avg. Return | 17.72% | 12.46% |
| Div. Yield | 0.52% | 2.04% |
| Expense Ratio | 0.19% | 0.08% |
The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% 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%.
IWF’s dividend yield is 1.52% lower than that of DGRO (0.52% vs. 2.04%). Also, IWF yielded on average 5.27% more per year over the past decade (17.72% vs. 12.46%). The expense ratio of IWF is 0.11 percentage points higher than DGRO’s (0.19% vs. 0.08%).
Fund Composition
Industry Exposure
| IWF | DGRO | |
| Technology | 39.29% | 18.98% |
| Industrials | 6.19% | 12.52% |
| Energy | 0.28% | 0.11% |
| Communication Services | 12.82% | 4.53% |
| Utilities | 0.03% | 7.34% |
| Healthcare | 9.23% | 17.55% |
| Consumer Defensive | 4.31% | 10.24% |
| Real Estate | 1.85% | 0.0% |
| Financial Services | 7.36% | 18.47% |
| Consumer Cyclical | 17.62% | 7.42% |
| Basic Materials | 1.01% | 2.83% |
The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.
IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.
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%.
IWF is 20.31% more exposed to the Technology sector than DGRO (39.29% vs 18.98%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 10.20% higher and 8.29% higher respectively (17.62% vs. 7.42% and 12.82% vs. 4.53%). In total, Energy, Basic Materials, and Real Estate also make up 0.20% more of the fund’s holdings compared to DGRO (3.14% vs. 2.94%).
Holdings
| IWF Holdings | Weight |
| Apple Inc | 10.51% |
| Microsoft Corp | 9.85% |
| Amazon.com Inc | 6.63% |
| Facebook Inc Class A | 3.91% |
| Alphabet Inc Class A | 3.2% |
| Alphabet Inc Class C | 3.03% |
| Tesla Inc | 2.45% |
| NVIDIA Corp | 2.14% |
| Visa Inc Class A | 1.91% |
| The Home Depot Inc | 1.62% |
IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.
Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.
| 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
| IWF | DGRO | |
| Mean Return | 1.48 | 0 |
| R-squared | 92.93 | 0 |
| Std. Deviation | 14.42 | 0 |
| Alpha | 2.16 | 0 |
| Beta | 1.03 | 0 |
| Sharpe Ratio | 1.19 | 0 |
| Treynor Ratio | 17.1 | 0 |
The iShares Russell 1000 Growth ETF (IWF) has a Treynor Ratio of 17.1 with a Standard Deviation of 14.42 and a Alpha of 2.16. Its Mean Return is 1.48 while IWF’s R-squared is 92.93. Furthermore, the fund has a Sharpe Ratio of 1.19 and a Beta of 1.03.
The iShares Core Dividend Growth ETF (DGRO) has a Beta of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while DGRO’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Treynor Ratio of 0.
IWF’s Mean Return is 1.48 points higher than that of DGRO and its R-squared is 92.93 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than DGRO. The Alpha and Beta of IWF are 2.16 points higher and 1.03 points higher than DGRO’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | DGRO |
| 2020 | 38.21% | 9.47% |
| 2019 | 36.08% | 30.02% |
| 2018 | -1.68% | -2.24% |
| 2017 | 29.96% | 22.84% |
| 2016 | 6.92% | 15.27% |
| 2015 | 5.48% | -0.62% |
| 2014 | 12.84% | 0.0% |
| 2013 | 33.19% | 0.0% |
| 2012 | 15.03% | 0.0% |
| 2011 | 2.47% | 0.0% |
| 2010 | 16.47% | 0.0% |
IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% 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 |
| IWF | $10,000 | $27,102 | 17.72% |
| DGRO | $10,000 | $19,580 | 12.46% |
A $10,000 investment in IWF would have resulted in a final balance of $27,102. This is a profit of $17,102 over 6 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
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%.
IWF’s CAGR is 5.27 percentage points higher than that of DGRO and as a result, would have yielded $7,522 more on a $10,000 investment. Thus, IWF outperformed DGRO by 5.27% annually.
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