What DGRO actually is

DGRO is an iShares ETF that tracks the Morningstar US Dividend Growth Index. The index picks US companies selected for a consistent history of growing dividends, and it can include large, mid and small companies. It is weighted by the dividend dollars each company pays, not by size.

It launched in 2014 and is part of the iShares Core family of building-block funds.

What is inside

Weighting by dividends paid means the fund leans toward companies that pay out the most cash, which can differ from the biggest companies by market value. Holdings span many sectors, with a mix of large and mid-sized dividend growers.

Distributions

DGRO pays out the dividends of its holdings regularly. Its yield is typically between that of a broad market fund and a high-yield dividend fund. Check the fund’s current yield, fees and distribution schedule on the issuer’s website, because they change.

What to keep in mind

  • Different weighting. Weights follow dividends paid, so it does not look like a market-cap fund.
  • Overlap. Many holdings also appear in other dividend funds.
  • Growth is not guaranteed. A company with a history of increases can still stall.
  • Market risk. It falls with the market.

Quick take

DGRO is a dividend growth ETF with a broader reach than some rivals. It suits investors who want income that grows over time without chasing the highest yield.