DGRO: A Buy As Capital Rotates Out Of Chips

I view the iShares Core Dividend Growth ETF as a compelling buy amid potential capital rotation out of semiconductors. DGRO's portfolio construction prioritizes companies with strong free cash flows, consistent dividend growth, and positive earnings forecasts, filtering out value traps. The ETF has a low starting yield (1.9%) but boasts an 8.93% 10-year dividend CAGR and 11 consecutive years of dividend growth. DGRO offers lower volatility (0.69 beta), sector diversification, and stands to benefit from market shifts away from technology-led momentum.

I'm one of those investors that naturally become skeptical when a sector experiences a rally that seems to last a bit too long. This has been the case with semiconductors, which have helped lift the