They say in golf, it’s the putting that counts. A long drive gets the gallery excited, but it’s the little white ball finding the hole that fills the scorecard. Same with these dividend plays. A high yield is a flash, a promise. It’s the growth of that payout, steady and reliable, that builds a fortress. I’ve been watching these funds for a while, and some are built on sand. This one, the iShares Core Dividend Growth ETF – DGRO – feels different. It’s not glamorous, but it’s got bones.
Most of these funds chase the streak – the companies that have raised dividends for ten, twenty years, a monument to consistency. Fine. But consistency can be a mask. DGRO does things its own way. It’s not about the longest run; it’s about quality, about building a portfolio that doesn’t buckle when the market gets rough. It’s a $38.37 billion fund, which means someone’s paying attention. Not just gamblers, either.
The Numbers Tell a Story
DGRO tracks the Morningstar US Dividend Growth Index. That means a focus on lower volatility, higher quality. It’s not about hitting home runs; it’s about getting on base, consistently. Over the last ten years, only two dividend ETFs have outperformed it. That’s not luck; that’s a strategy. They’re not trying to be clever; they’re trying to be right.
Now, the dividend aristocrats – the companies with those decades-long streaks – they share a lot of holdings with DGRO. Over fifty, in fact. But DGRO has beaten them over the last decade. The streak is nice, but it’s not everything. A dead man can have a streak.
They lean into the usual suspects – healthcare, consumer staples, industrials – about 43% of the fund. Safe harbors. But they’re also quietly building a position in technology. A sector that’s starting to understand the value of returning cash to shareholders. That’s a smart move. A quiet revolution.
Tech dividends are climbing. In 2024, only healthcare and financials saw higher growth rates. That’s a shift. And financials are looking solid. Improving balance sheets, passing the stress tests… they’re gearing up to reward shareholders. It’s not charity; it’s good business.
A Long Game
This ETF won’t set the world on fire in a bull market fueled by growth stocks that pay nothing. That’s the trade-off. You won’t see explosive gains. But that’s not the point. This is about building a foundation, a steady stream of income that can weather any storm. It’s about playing chess, not craps.
Over the last ten years, DGRO has a Sharpe Ratio that beats the Russell 1000 Value Index. That means it’s delivered better risk-adjusted returns. That’s not noise; that’s signal. And the annual expense ratio is a modest 0.08%. Eight bucks on a ten grand portfolio. You can afford to lose that. I can afford to lose that. But why would you?
I’ve seen too many of these funds built on hype, on promises. DGRO is different. It’s quiet, understated, and built to last. It’s not a showpiece; it’s a workhorse. And in this market, a workhorse is worth more than a thoroughbred.
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2026-02-17 20:32