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DGRW: A Dividend Growth ETF To Round Out Your Portfolio

Michael Fitzsimmons profile picture
Michael Fitzsimmons


  • The recent market rotation out of growth and into value and yield likely caught many investors flat-footed and over-weight in technology.
  • Dividend growth stocks should have an allocation in portfolios of  investors who want a well-diversified portfolio built for long-term success.
  • As compared to picking individual companies, some investors might prefer owning an ETF of dividend growth stocks for diversification and risk mitigation purposes.
  • Those investors should consider an allocation to the Wisdom Tree U.S. Quality Growth ETF as a relatively cost-efficient and well-performing vehicle for dividend growth exposure.

Pie-chart on paper graphs
Photo by Henrik5000/iStock via Getty Images

My followers know I advise investors to keep a well-diversified portfolio built for what the market wants to give you, total returns, risk mitigation, and ultimately long-term financial success and security. The recent market rotation likely caught many investors over-weight in growth and technology

This article was written by

Michael Fitzsimmons profile picture
Technology stocks, ETFs, portfolio strategy, renewable energy, and O&G companies. Primary goal is growing net-worth. I typically allocate a portion of my own portfolio and devote some of my SA articles to small and medium sized companies offering compelling risk/reward propositions. I am an Electronics Engineer, not a qualified investment advisor. While the information and data presented in my articles are obtained from company documents and/or sources believed to be reliable, they have not been independently verified. Therefore, I cannot guarantee its accuracy. I advise investors conduct their own research and due-diligence and to consult a qualified investment advisor. I explicitly disclaim any liability that may arise from investment decisions you make based on my articles. Thanks for reading and I wish you much investment success!

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am an electronics engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (32)

yardbird99 profile picture
The allocation $ column is empty on my browser, Safari, on MacOS Mojave.
Michael Fitzsimmons profile picture
Hi yardbird99 - hopefully the allocation is empty on all browsers and all OS's because it's empty on purpose. That's because the graphic is a sample portfolio template. If you read the article and the discussion around the template, I mention that one-size does not fit all. That is true for both the asset types and the allocation level.

So the smart thing to do is to customer your personal portfolio in terms of what asset categories do you want/need to have? Then decide on how much of your investment capital you want to allocate to each category. Thanks for reading and good-luck!
The common stock shares held by ETFs like DGRO are voted by the fund manager in ways that do not reflect passive management. Instead they are becoming more activist as evidenced by the Chairman of BlackRock's letter to investors. Here is a link to his letter:


If you want your shares voted this way by all means buy iShares ETF. It is one of many good DG ETFs. If not IMO you can get equally good returns by selecting the top holdings and purchase them outright. Commissions are zero for most of us and the holdings of the funds do not change dramatically. The SA author Dale Roberts advocated "skimming" many years ago and showed how simply it can be done. Search SA for his articles.

Stop fund/ETF managers from using your investment dollars to engage in political activity. Become your own fund manager. SA authors provide a lot of advice on equities covering a variety of investment styles. Use them to your benefit.
Michael Fitzsimmons profile picture
Hi liongterm - well, yes, people have "skimmed" for years, so there is not much new there.

As for funds engaging in "political activity", I would disagree with that perspective. ESG is a meaningful movement that is based on science, facts, and sustainability. And it is increasingly affecting how investable companies are viewed. For instance, there are many nation-state sovereign and retirement funds that invest with the underlying principals of ESG and I would suggest that the global movement in that direction is only just starting. If you want to tempt fate and buy a coal company, I think in 10-years you will regret that very much. Meantime, you can bet at some point there is going to be a price put on carbon.

So on the one hand I suppose an investor can look at this as "political" in nature, but as so often these days (i.e. the post-Trump era), facts and science is somehow viewed as being "political". My opinion is just the opposite: those that operate in a non-factual and unscientific manner are really the ones being "political" about what are really matters of science. I have the same opinion of the self-described "patriots" that attacked the US Capitol and tried to turn the US into just another banana republic with a tin-horn dictator-for-life. It was all based on lies, and I think they should all end up in jail for a long long time as I consider them to be traitors and an existential threat to US freedom, Democracy, the rule-of-law, and the US Constitution.

As for Blackrock, you should to ask yourself a question: why would the CEO of Blackrock be making a "political" issue out of what is a matter of science, global policy development, and ultimately what he like most cares about: investing? I would think investors would be listening to what the CEO of such a large and global financial investment firm has to say considering they will be making a lot of the stock purchases from money sent to them by their investors. Apparently, investors very much like what Blackrock is saying and doing (and the returns they are getting).

Thanks for reading and have a great weekend!
@Michael Fitzsimmons
My intent was to discuss passive vs active investment managers not party politics. It is my opinion that if an investor wishes to purchase an actively managed ETF such as an ESG fund that is her/his choice. When I invest in a "passive" fund it is to have the advantage of owning a broad group of stocks without having to buy/sell myself. Management of the businesses themselves should be left company management by my definition of "passive". Fund managers should either vote with management recommendations or abstain.

Now if you want to engage in name calling such as who is trying to run a banana republic I suggest that Biden and his supporters are much more likely to create one than Trump and his supporters. lf you want a discussion of what passive investing means drop that part of your response.

I would not object to a discussion of science with you but would prefer a different platform than SA - which should be about investing. However be prepared to answer the how's and why's and discuss the underlying data and model assumptions if you engage me. Repeating talking points from whatever political faction you support is not a scientific discussion.

Thanks for your response.
Michael Fitzsimmons profile picture
liongterm - GRID is an index fund. I can't take anything you say seriously after:

"Now if you want to engage in name calling such as who is trying to run a banana republic I suggest that Biden and his supporters are much more likely to create one than Trump and his supporters."

You're obviously a person that doesn't believe in facts let alone what your own eyes watched on Jan 6th. I am sure Biden and his supporters, just like all *real* patriotic Americans were sickened by what Trump and the new radicalized republican party of QAnon, Proud Boys, and Oath Takers ddid that day.

But obviously you have succumbed to the propaganda and lie perpetrated by the Putin/Trump regime via FakeBook, FOX News (an oxymoron if ever there was one...) and or course Trump's own mouth. You probably don't even know you are being used as a Putin pawn to bring down your own country by trying to install Trump as dictator-for-life.

And then you want to lecture me on having a "scientific discussion"? LoL

“Those who can make you believe absurdities, can make you commit atrocities."

Voltaire, 1765

Trump, Putin, RudyG, Ted Cruz, and the new radicalized republican gang of Proud Boys, Oath Takers, and QAnon nut-jobs are exhibit #1 as proof of Voltaires words.

The world is made up of electrons, protons, neutrons, and morons. Luckily on SA we have the MUTE function for the latter. Clearly I can learn nothing factual from you. Have fun in your "alternate facts" Trump bubble.

!!! MUTE !!!
I prefer the WisdomTree Global Quality Div (GGRA) as it's accumulation. Do you know any alternatives?
Michael Fitzsimmons profile picture
Hi LuxTux - yes, there are a plethora of options. Just google "dividend growth ETFs" and start sifting through the results. Thanks for reading and have a great weekend!
There are way too many ETFs and Mutual Funds. I am long on VOO, QQQ, SMH and SCHD. I don't lose sleep over yield. Fitz, DGRW is isomorphic to DGRO which you stated was underperforming when compared to SP500 in another article.
Michael Fitzsimmons profile picture
Hi LabDog - it's true, too many funds and also that the S&P500 has outperformed both DGRW and DGRO over the past 1, 3, and 5 year time frames. Thanks for reading and you observation.
VIG, SCHD and VYM are the ones to own.
Eileen Dover profile picture
@Kompressor They should (yield) keep you just ahead of inflation, before tax.
@Eileen Dover If you buy now, sure, but you shouldn’t be starting a position here.
I bought these last year, so my yields are great.
@Kompressor All are at 5 year highs.
Eileen Dover profile picture
1.8% yield and right at its 52 week high, so it yields very little and also has very little, if any, room for growth. Lucky I stopped after checking it before reading the article.
@Eileen Dover Yes, same as the rest of the market, this is too expensive now. That being said, this is a Dividend Growth etf, not to be confused with a High Dividend etf. Completely different methodology. Dividend Growth etfs will never have a high yield - that’s not their purpose.
Best usage of Dividend Growth etfs is with QQQ. VIG + QQQ can be tuned to easily beat VOO. I would not consider buying DGRO or DGRW.
Michael Fitzsimmons profile picture
Hi Eileen - as I pointed out in the article, this ETF should not be bought for yield and/or income. It is obviously much more levered to capital appreciation. There are much better vehicles in the market if yield is what you are seeking.
Eileen Dover profile picture
@Michael Fitzsimmons Why write an article now on something that is not for yield or income but for growth when it is already at its 52 week high in an overpriced market? Odds are it only has one place to go, down.
Wapiti19 profile picture
Too high of expense ratio of .28 for this and too low of divy also.Better selections everywhere starting with Vanguard and SCHD.
Michael Fitzsimmons profile picture
Hi Wapiti - well, as I pointed out in the article, this fund really isn't designed for yield, yes, according to Seeking Alpha's chart comparison tool, SCHD has out-performed DGRW by 12% over the past three years. Thanks for the observation and good luck to you.
garkster profile picture
I think WisdomTree misled you slightly by the way they displayed the distributions. Yes, it makes sense that there would be significant deviations month-to-month, but not quarter-to-quarter, so comparing the Dec. to the Mar. it looked off because the 12/30 was so small.
Sure enough, the one you have looks like a y/e 1-off special to distribute some residual income. The regular Q4 went ex- on 12/21 and paid 0.155, more in-line with the 3/25.
I'm also confused by the chart comparing the three ETFs for 5-years. Even though all have long enough track records, two of them start randomly.
Finally, VDIGX is not the Vanguard dividend ETF -- it is an actively managed very concentrated mutual fund sub-advised by Wellington. I think that the ticker you want is VIG which is the Vanguard Dividend Appreciation ETF -- there is no Vanguard Dividend Growth ETF.
Michael Fitzsimmons profile picture
Hi garkster - not sure the mechanics of why/how matters that much as long as investors understand this fund pays a monthly dividend and its quite lumpy. Also important that the fund's distributions have, at least so far, been dominated by "qualified dividends" and not short or long-term gains.

I will look into the chart, I've had trouble with the Seeking Alpha charting tool when it comes to total returns. When I just use price it works great, but then I get dinged for not including dividends in the returns.

The Seeking Alpha webpage says:

"VDIGX: Vanguard Dividend Growth Fund Investor Shares Inv,

Oh, I see, your objection is that I wrote "ETF" ... my bad, it's just a fund. I will submit an edit to fix that. But no, I was not referring to VIG. Thanks!
Seems like you’re better off just holding a smattering of the top ten stocks in the ETF. Virtually all of them pay a higher or significantly higher dividend than the ETF itself.
Michael Fitzsimmons profile picture
Hi rocketjs - yes, if all you care about is income (and advise you to think twice if income is your sole "strategy"...) then as I pointed out in the article:

"Obviously, one could cobble together a few of the ETF's individual top-10 picks - like Verizon, Altria, and Pfizer for instance - and get a yield closer to 5%."

But as I also pointed out in the article, this ETF is not oriented to be an income producer. It is much more levered to capital appreciation. And that is why it has performed so well. The point being, there is a difference between dividend growth, and dividend income. This fund is much more oriented to the former, and to capital appreciation. As I also pointed out, the yield is only 2.59%.
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