The Vanguard FTSE Europe Index Fund ETF Shares (VGK) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. VGK is a Vanguard Europe Stock fund and DGRO is a iShares Large Value fund. So, what’s the difference between VGK and DGRO? And which fund is better?
VGK and DGRO have the same expense ratio: 0.08%. VGK also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VGK has provided lower returns than DGRO over the past 6 years.
In this article, we’ll compare VGK vs. DGRO. We’ll look at performance and portfolio growth, as well as at their fund composition and holdings. Moreover, I’ll also discuss VGK’s and DGRO’s risk metrics, industry exposure, and annual returns and examine how these affect their overall returns.
|Name||Vanguard FTSE Europe Index Fund ETF Shares||iShares Core Dividend Growth ETF|
|Category||Europe Stock||Large Value|
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
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%.
VGK’s dividend yield is 0.48% higher than that of DGRO (2.52% vs. 2.04%). Also, VGK yielded on average 5.78% less per year over the past decade (6.68% vs. 12.46%). VGK and DGRO have the same expense ratio: 0.08%.
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The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
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%.
VGK is 2.62% less exposed to the Financial Services sector than DGRO (15.85% vs 18.47%). VGK’s exposure to Industrials and Healthcare stocks is 3.06% higher and 3.79% lower respectively (15.58% vs. 12.52% and 13.76% vs. 17.55%). In total, Utilities, Energy, and Communication Services also make up 1.30% more of the fund’s holdings compared to DGRO (13.28% vs. 11.98%).
|ASML Holding NV||2.2%|
|Roche Holding AG||2.13%|
|LVMH Moet Hennessy Louis Vuitton SE||1.58%|
|Novo Nordisk A/S B||1.09%|
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
|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%.
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The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Beta of 1.06 with a R-squared of 92.76 and a Treynor Ratio of 5.12. Its Standard Deviation is 16.65 while VGK’s Mean Return is 0.61. Furthermore, the fund has a Sharpe Ratio of 0.4 and a Alpha of 0.45.
The iShares Core Dividend Growth ETF (DGRO) has a Beta of 0 with a Treynor Ratio of 0 and a R-squared of 0. Its Sharpe Ratio is 0 while DGRO’s Standard Deviation is 0. Furthermore, the fund has a Mean Return of 0 and a Alpha of 0.
VGK’s Mean Return is 0.61 points higher than that of DGRO and its R-squared is 92.76 points higher. With a Standard Deviation of 16.65, VGK is slightly more volatile than DGRO. The Alpha and Beta of VGK are 0.45 points higher and 1.06 points higher than DGRO’s Alpha and Beta.
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VGK had its best year in 2017 with an annual return of 27.06%. VGK’s worst year over the past decade yielded -14.79% and occurred in 2018. In most years the Vanguard FTSE Europe Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to -0.59%, 5.01%, and 6.5% 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 VGK would have resulted in a final balance of $13,976. This is a profit of $3,976 over 6 years and amounts to a compound annual growth rate (CAGR) of 6.68%.
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%.
VGK’s CAGR is 5.78 percentage points lower than that of DGRO and as a result, would have yielded $5,604 less on a $10,000 investment. Thus, VGK performed worse than DGRO by 5.78% annually.
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