DGRO vs. HDV: Growth vs. Yield for Long-Term Retirees
The article compares the iShares Core Dividend Growth ETF (DGRO) and the iShares Core High Dividend ETF (HDV), both of which charge 0.08% and exclude REITs. HDV currently yields much more, generating about $33,400 annually per $1 million versus $19,500 for DGRO, but DGRO returned 13.38% annualized over the past decade compared with 9.11% for HDV. For retirees who will not touch the money for 10 years, the article favors total return over current distributions, though a 50/50 allocation can split the difference.
Both funds are BlackRock iShares core offerings with the same 0.08% fee and no REIT exposure, a structure the article notes can aid tax efficiency. HDV’s 30-day SEC yield is 3.34%, versus DGRO’s 1.95%. On a $1 million balance, that means about $33,400 yearly from HDV and $19,500 from DGRO before taxes.
Historically, DGRO’s 13.38% annualized return with reinvested dividends would have grown $1 million to roughly $3.51 million over a decade; HDV’s 9.11% would have reached about $2.39 million. The article presents a 50/50 allocation as a possible middle ground.
This comparison may shape how retirees and near-retirees weigh current income against long-term growth, potentially moving some portfolios toward lower-yielding funds with stronger historical returns. Advisors and fund providers could see more focus on total return, withdrawal sustainability, and tax efficiency. Households depending on investment income may experience different long-term wealth and spending flexibility, though market performance, taxes, and personal time horizons could alter outcomes.