iShares Core Dividend Growth ETF (DGRO): A Tier Two ETF

As investors get older, their goals begin to change.

Growth is still important.

But income starts becoming important too.

That's exactly where DGRO shines.

The iShares Core Dividend Growth ETF (DGRO) is designed to own companies that consistently increase their dividends while offering a little more current income than many traditional growth ETFs.

For a Tier Two DGI Crabber, that's exactly the balance I'm looking for.

Key Statistics

Ticker: DGRO
Tier: Tier Two
Investment Style: U.S. Dividend Growth
Fund Inception: June 10, 2014
Expense Ratio: 0.08%
Number of Holdings: Approximately 400
Index Tracked: Morningstar US Dividend Growth Index

DGRO follows a rules-based approach designed to identify companies with sustainable dividends and a history of increasing shareholder payouts, while maintaining a remarkably low expense ratio.

Why DGRO Fits Tier Two

Tier Two is designed for investors who have moved beyond the earliest stages of wealth accumulation but still have many years before retirement.

The goal is to continue building wealth while allowing the portfolio to begin producing meaningful dividend income.

Across my Tier Two portfolio, I'm generally looking for:

A dividend yield between approximately 2% and 4%
Annual dividend growth around 7% to 8%

DGRO fits that objective beautifully.

It generally offers more current income than SCHG or VIG while still focusing on companies capable of increasing their dividends over time.

That's exactly the role I want a Tier Two ETF to play.

What Does DGRO Own?

One of DGRO's biggest strengths is the quality of its holdings.

Many of the companies inside the fund are already familiar to DGI Crabbers because they're featured throughout my 50-stock series.

Businesses like Microsoft (MSFT), Visa (V), Home Depot (HD), JPMorgan Chase (JPM), Procter & Gamble (PG), AbbVie (ABBV), McDonald's (MCD), Lowe's (LOW), Automatic Data Processing (ADP), BlackRock (BLK), and Chevron (CVX) all represent the type of financially strong, shareholder-friendly companies that DGRO seeks to own.

Instead of researching hundreds of businesses individually, investors gain exposure to approximately 400 companies through one simple investment.

Why I Like DGRO

One characteristic I particularly appreciate is DGRO's emphasis on dividend sustainability.

The fund doesn't simply chase the highest yields.

It looks for companies with healthy dividend policies and the financial strength to continue increasing shareholder payouts.

That naturally steers the portfolio toward businesses with durable competitive advantages and disciplined management teams.

Those are exactly the kinds of companies I want to own.

Who Is This ETF For?

DGRO is ideal for investors who:

Are building a Tier Two portfolio.
Want more dividend income than a traditional growth ETF.
Still value long-term dividend growth.
Prefer broad diversification.
Want a simple, low-cost core holding that balances growth with income.

It also works exceptionally well alongside individual Tier Two stocks, allowing investors to build concentrated positions in favorite companies while maintaining broad diversification across the rest of the market.

The Bridge Between Growth and Income

One of the reasons DGRO has earned a permanent place in my ETF framework is that it bridges two important investing objectives.

You don't have to sacrifice future growth just because you begin caring about dividend income.

Likewise, you don't have to chase high yields before you're ready.

DGRO sits comfortably between those two extremes.

It gives investors a little more income today while continuing to invest in companies capable of rewarding shareholders for decades to come.

That's exactly what Tier Two is all about.

Final Thoughts from the DGI Crab

DGRO represents one of my favorite ways to transition from pure growth investing toward a more balanced dividend growth portfolio.

Broad diversification. Outstanding businesses. Growing dividends. Meaningful current income. And an extremely low expense ratio.

For Tier Two DGI Crabbers, it's an outstanding core holding.

It reminds us that successful investing isn't about choosing between growth and income.

Sometimes the best answer is owning an ETF designed to deliver both.

That's exactly why DGRO has earned its place as one of my favorite Tier Two ETFs.