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IWR vs. DGRO: What’s The Difference?

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

The expense ratio of IWR is 0.11 percentage points higher than DGRO’s (0.19% vs. 0.08%). IWR also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWR has provided higher returns than DGRO over the past ten years.

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

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Summary

IWRDGRO
NameiShares Russell Mid-Cap ETFiShares Core Dividend Growth ETF
CategoryMid-Cap BlendLarge Value
IssueriSharesiShares
AUM29.84B20B
Avg. Return14.15%12.46%
Div. Yield0.99%2.04%
Expense Ratio0.19%0.08%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% 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%.

IWR’s dividend yield is 1.05% lower than that of DGRO (0.99% vs. 2.04%). Also, IWR yielded on average 1.69% more per year over the past decade (14.15% vs. 12.46%). The expense ratio of IWR is 0.11 percentage points higher than DGRO’s (0.19% vs. 0.08%).

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Fund Composition

Industry Exposure

IWR vs. DGRO - Industry Exposure

IWRDGRO
Technology19.67%18.98%
Industrials14.54%12.52%
Energy3.48%0.11%
Communication Services4.64%4.53%
Utilities4.46%7.34%
Healthcare11.76%17.55%
Consumer Defensive3.82%10.24%
Real Estate8.31%0.0%
Financial Services11.64%18.47%
Consumer Cyclical13.59%7.42%
Basic Materials4.1%2.83%

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

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%.

IWR is 0.69% more exposed to the Technology sector than DGRO (19.67% vs 18.98%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 2.02% higher and 6.17% higher respectively (14.54% vs. 12.52% and 13.59% vs. 7.42%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 8.03% less of the fund’s holdings compared to DGRO (12.38% vs. 20.41%).

Holdings

IWR - Holdings

IWR HoldingsWeight
IDEXX Laboratories Inc0.51%
DocuSign Inc0.51%
Twitter Inc0.48%
Chipotle Mexican Grill Inc0.47%
Roku Inc Class A0.44%
Marvell Technology Inc0.44%
DexCom Inc0.44%
Trane Technologies PLC0.43%
MSCI Inc0.43%
Carrier Global Corp Ordinary Shares0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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

IWRDGRO
Mean Return1.170
R-squared91.520
Std. Deviation15.660
Alpha-2.80
Beta1.110
Sharpe Ratio0.860
Treynor Ratio11.720

The iShares Russell Mid-Cap ETF (IWR) has a R-squared of 91.52 with a Standard Deviation of 15.66 and a Alpha of -2.8. Its Sharpe Ratio is 0.86 while IWR’s Treynor Ratio is 11.72. Furthermore, the fund has a Beta of 1.11 and a Mean Return of 1.17.

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

IWR’s Mean Return is 1.17 points higher than that of DGRO and its R-squared is 91.52 points higher. With a Standard Deviation of 15.66, IWR is slightly more volatile than DGRO. The Alpha and Beta of IWR are 2.80 points lower and 1.11 points higher than DGRO’s Alpha and Beta.

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Performance

Annual Returns

IWR vs. DGRO - Annual Returns

YearIWRDGRO
202016.91%9.47%
201930.31%30.02%
2018-9.13%-2.24%
201718.32%22.84%
201613.58%15.27%
2015-2.57%-0.62%
201413.03%0.0%
201334.5%0.0%
201217.13%0.0%
2011-1.67%0.0%
201025.25%0.0%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% 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

IWR vs. DGRO - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWR$10,000$18,12614.15%
DGRO$10,000$19,58012.46%

A $10,000 investment in IWR would have resulted in a final balance of $18,126. This is a profit of $8,126 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

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%.

IWR’s CAGR is 1.69 percentage points higher than that of DGRO and as a result, would have yielded $1,454 less on a $10,000 investment. Thus, IWR outperformed DGRO by 1.69% annually.


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