Is WisdomTree U.S. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?

Launched on 05/22/2013, the WisdomTree U.S. Quality Dividend Growth ETF (DGRW) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is managed by Wisdomtree, and has been able to amass over $15.97 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Value. DGRW seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index before fees and expenses.

The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 1.41%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Looking at individual holdings, Dreyfus Trsy Oblig Cash Mgmt Cl Ins accounts for about 67.11% of total assets, followed by Us Dollar and Microsoft Corp (MSFT).

DGRW's top 10 holdings account for about 132.8% of its total assets under management.

Performance and Risk

The ETF has gained about 10.93% and it's up approximately 7.07% so far this year and in the past one year (as of 11/17/2025), respectively. DGRW has traded between $71.28 and $90.60 during this last 52-week period.

The fund has a beta of 0.84 and standard deviation of 12.91% for the trailing three-year period, which makes DGRW a medium risk choice in this particular space. With about 303 holdings, it effectively diversifies company-specific risk .

Alternatives

WisdomTree U.S. Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. iShares Core Dividend Growth ETF has $34.86 billion in assets, Vanguard Dividend Appreciation ETF has $98.81 billion. DGRO has an expense ratio of 0.08% and VIG changes 0.05%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value

Bottom Line

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This article originally published on Zacks Investment Research (zacks.com).

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