VOO vs. DGRO: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between VOO and DGRO? And which fund is better?

The expense ratio of VOO is 0.05 percentage points lower than DGRO’s (0.03% vs. 0.08%). VOO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VOO has provided higher returns than DGRO over the past ten years.

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

Summary

VOO DGRO
Name Vanguard S&P 500 ETF iShares Core Dividend Growth ETF
Category Large Blend Large Value
Issuer Vanguard iShares
AUM 753.41B 20B
Avg. Return 14.45% 12.46%
Div. Yield 1.34% 2.04%
Expense Ratio 0.03% 0.08%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

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%.

VOO’s dividend yield is 0.70% lower than that of DGRO (1.34% vs. 2.04%). Also, VOO yielded on average 1.99% more per year over the past decade (14.45% vs. 12.46%). The expense ratio of VOO is 0.05 percentage points lower than DGRO’s (0.03% vs. 0.08%).

Fund Composition

Industry Exposure

VOO vs. DGRO - Industry Exposure

VOO DGRO
Technology 24.24% 18.98%
Industrials 8.86% 12.52%
Energy 2.84% 0.11%
Communication Services 11.14% 4.53%
Utilities 2.43% 7.34%
Healthcare 13.1% 17.55%
Consumer Defensive 6.32% 10.24%
Real Estate 2.58% 0.0%
Financial Services 14.2% 18.47%
Consumer Cyclical 12.01% 7.42%
Basic Materials 2.27% 2.83%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.

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%.

VOO is 5.26% more exposed to the Technology sector than DGRO (24.24% vs 18.98%). VOO’s exposure to Financial Services and Healthcare stocks is 4.27% lower and 4.45% lower respectively (14.2% vs. 18.47% and 13.1% vs. 17.55%). In total, Utilities, Real Estate, and Energy also make up 0.40% more of the fund’s holdings compared to DGRO (7.85% vs. 7.45%).

Holdings

VOO - Holdings

VOO Holdings Weight
Apple Inc 5.92%
Microsoft Corp 5.62%
Amazon.com Inc 4.06%
Facebook Inc Class A 2.29%
Alphabet Inc Class A 2.02%
Alphabet Inc Class C 1.97%
Tesla Inc 1.44%
Berkshire Hathaway Inc Class B 1.44%
NVIDIA Corp 1.37%
JPMorgan Chase & Co 1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

DGRO - Holdings

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%.

Performance

Annual Returns

VOO vs. DGRO - Annual Returns

Year VOO DGRO
2020 18.35% 9.47%
2019 31.46% 30.02%
2018 -4.42% -2.24%
2017 21.78% 22.84%
2016 11.93% 15.27%
2015 1.35% -0.62%
2014 13.63% 0.0%
2013 32.33% 0.0%
2012 15.98% 0.0%
2011 2.09% 0.0%
2010 0.0% 0.0%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% 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

VOO vs. DGRO - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $20,543 14.45%
DGRO $10,000 $19,580 12.46%

A $10,000 investment in VOO would have resulted in a final balance of $20,543. This is a profit of $10,543 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

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%.

VOO’s CAGR is 1.99 percentage points higher than that of DGRO and as a result, would have yielded $963 more on a $10,000 investment. Thus, VOO outperformed DGRO by 1.99% annually.


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