The Vanguard Large-Cap Index Fund ETF Shares (VV) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. VV is a Vanguard Large Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between VV and DGRO? And which fund is better?
The expense ratio of VV is 0.04 percentage points lower than DGRO’s (0.04% vs. 0.08%). VV also has a higher exposure to the technology sector and a higher standard deviation. Overall, VV has provided higher returns than DGRO over the past 6 years.
In this article, we’ll compare VV vs. DGRO. We’ll look at fund composition and holdings, as well as at their performance and annual returns. Moreover, I’ll also discuss VV’s and DGRO’s portfolio growth, risk metrics, and industry exposure and examine how these affect their overall returns.
Summary
| VV | DGRO | |
| Name | Vanguard Large-Cap Index Fund ETF Shares | iShares Core Dividend Growth ETF |
| Category | Large Blend | Large Value |
| Issuer | Vanguard | iShares |
| AUM | 37.65B | 20B |
| Avg. Return | 14.75% | 12.46% |
| Div. Yield | 1.26% | 2.04% |
| Expense Ratio | 0.04% | 0.08% |
The Vanguard Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% 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%.
VV’s dividend yield is 0.78% lower than that of DGRO (1.26% vs. 2.04%). Also, VV yielded on average 2.29% more per year over the past decade (14.75% vs. 12.46%). The expense ratio of VV is 0.04 percentage points lower than DGRO’s (0.04% vs. 0.08%).
Fund Composition
Industry Exposure
| VV | DGRO | |
| Technology | 25.38% | 18.98% |
| Industrials | 8.39% | 12.52% |
| Energy | 2.62% | 0.11% |
| Communication Services | 11.68% | 4.53% |
| Utilities | 2.35% | 7.34% |
| Healthcare | 13.22% | 17.55% |
| Consumer Defensive | 6.06% | 10.24% |
| Real Estate | 2.7% | 0.0% |
| Financial Services | 13.82% | 18.47% |
| Consumer Cyclical | 11.65% | 7.42% |
| Basic Materials | 2.13% | 2.83% |
The Vanguard Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.
VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.
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%.
VV is 6.40% more exposed to the Technology sector than DGRO (25.38% vs 18.98%). VV’s exposure to Financial Services and Healthcare stocks is 4.65% lower and 4.33% lower respectively (13.82% vs. 18.47% and 13.22% vs. 17.55%). In total, Utilities, Energy, and Real Estate also make up 0.22% more of the fund’s holdings compared to DGRO (7.67% vs. 7.45%).
Holdings
| VV Holdings | Weight |
| Apple Inc | 5.7% |
| Microsoft Corp | 5.35% |
| Amazon.com Inc | 3.87% |
| Facebook Inc Class A | 2.19% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.81% |
| Tesla Inc | 1.37% |
| Berkshire Hathaway Inc Class B | 1.3% |
| NVIDIA Corp | 1.24% |
| JPMorgan Chase & Co | 1.24% |
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
| 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
| VV | DGRO | |
| Mean Return | 1.24 | 0 |
| R-squared | 99.86 | 0 |
| Std. Deviation | 13.75 | 0 |
| Alpha | -0.08 | 0 |
| Beta | 1.01 | 0 |
| Sharpe Ratio | 1.04 | 0 |
| Treynor Ratio | 14.14 | 0 |
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Treynor Ratio of 14.14 with a Standard Deviation of 13.75 and a Mean Return of 1.24. Its Sharpe Ratio is 1.04 while VV’s Beta is 1.01. Furthermore, the fund has a Alpha of -0.08 and a R-squared of 99.86.
The iShares Core Dividend Growth ETF (DGRO) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while DGRO’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.
VV’s Mean Return is 1.24 points higher than that of DGRO and its R-squared is 99.86 points higher. With a Standard Deviation of 13.75, VV is slightly more volatile than DGRO. The Alpha and Beta of VV are 0.08 points lower and 1.01 points higher than DGRO’s Alpha and Beta.
Performance
Annual Returns
| Year | VV | DGRO |
| 2020 | 20.99% | 9.47% |
| 2019 | 31.39% | 30.02% |
| 2018 | -4.44% | -2.24% |
| 2017 | 22.03% | 22.84% |
| 2016 | 11.65% | 15.27% |
| 2015 | 1.07% | -0.62% |
| 2014 | 13.39% | 0.0% |
| 2013 | 32.65% | 0.0% |
| 2012 | 16.09% | 0.0% |
| 2011 | 1.58% | 0.0% |
| 2010 | 15.81% | 0.0% |
VV had its best year in 2013 with an annual return of 32.65%. VV’s worst year over the past decade yielded -4.44% and occurred in 2018. In most years the Vanguard Large-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.39%, 15.81%, and 16.09% 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 |
| VV | $10,000 | $20,918 | 14.75% |
| DGRO | $10,000 | $19,580 | 12.46% |
A $10,000 investment in VV would have resulted in a final balance of $20,918. This is a profit of $10,918 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.75%.
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%.
VV’s CAGR is 2.29 percentage points higher than that of DGRO and as a result, would have yielded $1,338 more on a $10,000 investment. Thus, VV outperformed DGRO by 2.29% annually.
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