VTV vs. DGRO: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and DGRO is a iShares Large Value fund. So, what’s the difference between VTV and DGRO? And which fund is better?

The expense ratio of VTV is 0.04 percentage points lower than DGRO’s (0.04% vs. 0.08%). VTV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VTV has provided lower returns than DGRO over the past ten years.

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

Summary

VTV DGRO
Name Vanguard Value Index Fund ETF Shares iShares Core Dividend Growth ETF
Category Large Value Large Value
Issuer Vanguard iShares
AUM 125.77B 20B
Avg. Return 12.07% 12.46%
Div. Yield 2.15% 2.04%
Expense Ratio 0.04% 0.08%

The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.

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%.

VTV’s dividend yield is 0.11% higher than that of DGRO (2.15% vs. 2.04%). Also, VTV yielded on average 0.38% less per year over the past decade (12.07% vs. 12.46%). The expense ratio of VTV is 0.04 percentage points lower than DGRO’s (0.04% vs. 0.08%).

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Fund Composition

Industry Exposure

VTV vs. DGRO - Industry Exposure

VTV DGRO
Technology 7.86% 18.98%
Industrials 12.61% 12.52%
Energy 5.59% 0.11%
Communication Services 5.49% 4.53%
Utilities 5.37% 7.34%
Healthcare 19.84% 17.55%
Consumer Defensive 10.72% 10.24%
Real Estate 3.01% 0.0%
Financial Services 22.81% 18.47%
Consumer Cyclical 3.79% 7.42%
Basic Materials 2.91% 2.83%

The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.

VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.

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%.

VTV is 4.34% more exposed to the Financial Services sector than DGRO (22.81% vs 18.47%). VTV’s exposure to Healthcare and Industrials stocks is 2.29% higher and 0.09% higher respectively (19.84% vs. 17.55% and 12.61% vs. 12.52%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 2.59% less of the fund’s holdings compared to DGRO (12.17% vs. 14.76%).

Holdings

VTV - Holdings

VTV Holdings Weight
Berkshire Hathaway Inc Class B 2.98%
JPMorgan Chase & Co 2.82%
Johnson & Johnson 2.6%
UnitedHealth Group Inc 2.27%
Procter & Gamble Co 1.98%
Bank of America Corp 1.91%
Exxon Mobil Corp 1.6%
Comcast Corp Class A 1.57%
Intel Corp 1.36%
Verizon Communications Inc 1.32%

VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.

Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.

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%.

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Risk Analysis

VTV DGRO
Mean Return 1.05 0
R-squared 92.61 0
Std. Deviation 13.78 0
Alpha -1.92 0
Beta 0.98 0
Sharpe Ratio 0.87 0
Treynor Ratio 11.94 0

The Vanguard Value Index Fund ETF Shares (VTV) has a Alpha of -1.92 with a R-squared of 92.61 and a Mean Return of 1.05. Its Treynor Ratio is 11.94 while VTV’s Standard Deviation is 13.78. Furthermore, the fund has a Beta of 0.98 and a Sharpe Ratio of 0.87.

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

VTV’s Mean Return is 1.05 points higher than that of DGRO and its R-squared is 92.61 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than DGRO. The Alpha and Beta of VTV are 1.92 points lower and 0.98 points higher than DGRO’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. DGRO - Annual Returns

Year VTV DGRO
2020 2.23% 9.47%
2019 25.85% 30.02%
2018 -5.39% -2.24%
2017 17.12% 22.84%
2016 16.88% 15.27%
2015 -0.89% -0.62%
2014 13.19% 0.0%
2013 33.03% 0.0%
2012 15.19% 0.0%
2011 1.16% 0.0%
2010 14.45% 0.0%

VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% 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

VTV vs. DGRO - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $16,514 12.07%
DGRO $10,000 $19,580 12.46%

A $10,000 investment in VTV would have resulted in a final balance of $16,514. This is a profit of $6,514 over 6 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

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%.

VTV’s CAGR is 0.38 percentage points lower than that of DGRO and as a result, would have yielded $3,066 less on a $10,000 investment. Thus, VTV performed worse than DGRO by 0.38% annually.


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