Many investors nearing retirement and those already in retirement turn to dividend ETFs for a reliable and steady stream of income through equities in a diversified portfolio.
A smart beta exchange traded fund, the iShares Core Dividend Growth ETF (DGRO) debuted on 06/10/2014, and offers broad exposure to the Style Box - Large Cap Value category of the market.
There are plenty of dividend stocks out there for equity investors looking to maximize their overall total portfolio returns.
iShares Core Dividend Growth ETF's 2025 reconstitution strengthens its dividend growth focus while trimming high-yield risks, maintaining a balanced 2.24% yield and 7.80% DPS growth across the majority of the portfolio. Despite modest 4.73% annual dividend growth in 2025, the ETF delivered 15.6% total returns with lower volatility than the S&P 500, underscoring its resilient price and dividend growth methodology. As a core holding in taxable portfolios, DGRO offers tax-efficient passive income for long-term retirement, though its conservative yield prompts diversification into higher-income options like NEOS funds.
I reiterate a buy on the Vanguard High Dividend Yield Index Fund ETF and upgrade the iShares Core Dividend Growth ETF to a strong buy, favoring DGRO's growth-adjusted valuation with the updated rate cut outlook. Both DGRO and VYM are attractively valued when compared to the SP500 approximated by VOO when adjusted for yield and growth. Between DGRO and VYM, DGRO's focus on dividend growth and tech exposure offers an even stronger risk/return profile.
The iShares Core Dividend Growth ETF is rated a strong buy for its quality holdings and consistent dividend growth. DGRO's top holdings, including Apple, Johnson & Johnson, and Exxon Mobil, demonstrate robust fundamentals and industry leadership supporting future dividend growth. The fund's top 10 holdings averaged 30.32% dividend growth over five years, but several exhibit payout ratios outside the healthy 35–55% range.
iShares Core Dividend Growth ETF has a strong track record as a dividend growth and wealth compounding machine. However, it has a key structural weakness. We look at this weakness more deeply and explain why it prevents us from wanting to own it.
The iShares Core Dividend Growth ETF (DGRO) made its debut on 06/10/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
The iShares Core Dividend Growth ETF (DGRO) made its debut on 06/10/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
The iShares Core Dividend Growth ETF is a rare dividend fund that prioritizes dividend growth over yield. Consistent dividend increases often signal strong cash flow, as well as management confidence in future earnings. Consistent dividend growth is much more highly correlated with high total returns than high yield is.
Holding a bunch of stocks from the same sector doesn't mean you're diversified. In fact, it could make your portfolio more vulnerable. Small positions (
I am supportive of the general idea of dividend growth investing, since it is a simple but powerful way to select high-quality stocks. DGRO offers one interpretation of a dividend growth strategy, and has provided strong results since its 2014 inception, especially in weaker periods for the broader market. Nonetheless, I am concerned that its stock selection is too simple and robotic, especially the rule which disqualifies the highest 10% yielding stocks available.