DGRO: The 1.89% Yield Is The Least Of Its Problems

Geneva Investor 3.88K Followers Follow Summary I see no compelling case for the iShares Core Dividend Growth ETF to outperform, given its diluted large-cap exposure and weak income profile. DGRO is up ~10.4% since my March piece, behind ~12.1% for SCHD and ~13.6% for the S&P 500, through a war, $100 oil and a live hike debate. I think August CPI removed the last catalyst. Core slowed to 2.4% YoY for a fourth straight month, and I do not see another defensive rotation from here. Microsoft is now the largest holding at ~3.49%, with Exxon fourth. The fund looks like a diluted index, not a defensive rotation vehicle. DGRO yields ~1.89% against a 3.50% - 3.75% Fed rate. SCHD still yields ~3.08%, owns more energy and staples, and remains my preferred income fund. It would also be a better macro hedge. DGRO: underdoing an identity crisis? Mininyx Doodle/iStock via Getty Images Back in March, I argued that the rotation into value and dividend payers had already happened and that the iShares Core Dividend Growth ETF ( DGRO ) was a This article was written by Geneva Investor 3.88K Followers Follow I write about Macro and fundamentals, with the (painful) awareness momentum and sentiment are what really matters. That’s why I never try to time the market and I only buy stocks if I am willing to hold them for at least 10 years. When it comes to fundamentals, everybody knows the market is forward looking, but few understand what that means. I don’t look at a P/E number and decide to buy if a stock is “cheap”. I see the market as literally just the meeting point between demand and supply and I always try to understand what it sees in a stock beyond the numbers. This often implies trying to understand sectors, industries and long term growth trends. My approach requires ingenuity, curiosity and a good dose of naivete, as well as being comfortable with (sometimes) going against the current.I am based in Geneva, Switzerland (hence my SA name). Friend "Rex Investing" is also a contributor to Seeking Alpha. All opinions and analysis are exclusively my own.You can follow me on Twitter @ x.com/GenevaInvestor. I am also on medium.com/@genevainvestor. Analyst’s Disclosure: I/we have a beneficial long position in the shares of SCHD, VOO, QQQM either through stock ownership, options, or other derivatives. 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. 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.