Generated April 2026 from current fund data.
Overview
DGRO and VIG are both dividend-growth ETFs that own U.S. stocks with track records of rising payouts, but they screen for different characteristics and track different indexes. DGRO uses the Morningstar U.S. Dividend Growth Index and actively screens out high-yielding stocks (top decile), while VIG tracks the S&P U.S. Dividend Growers Index and requires a minimum 10-year history of consecutive dividend increases. The key distinction: DGRO prioritizes growth-oriented dividend payers with sustainable payout ratios; VIG prioritizes longevity and consistency of dividend growth.
How they differ
The biggest difference is their screening philosophy. DGRO excludes the highest-yielding 10% of dividend stocks and caps payout ratios at 75%, tilting the fund toward reinvestment-focused, slower-payout growers. VIG simply requires 10 consecutive years of dividend increases with no yield cap, so it can hold higher-yielding payers as long as they've raised distributions annually. This shows up in yield: DGRO yields 1.93% versus VIG at 1.55%.
Second, the funds are sized very differently. VIG is more than three times larger by assets under management ($117 billion vs. $37.5 billion), which typically translates to tighter spreads and lower trading costs for VIG shareholders. VIG also has a longer track record, launching in 2006 versus DGRO's 2014 inception, giving it an extra eight years of history.
Third, DGRO carries a slightly higher expense ratio (0.08% vs. 0.04%), though the gap is negligible in absolute terms. Both have low costs relative to active dividend-focused funds.
Who each is best for
- DGRO: Income-focused investors who believe dividend growth stocks should prioritize capital preservation and modest reinvestment over high current yield, and who are comfortable with a more concentrated strategy tilted toward growth.
- VIG: Long-term accumulation investors seeking broad exposure to blue-chip dividend raisers, or those who prefer the largest, most liquid dividend-growth fund with the lowest fees and longest operating history.
Key risks to know
- Yield-screening gap. DGRO's exclusion of high-yielding dividend stocks means it misses some mature, stable payers; conversely, VIG's lack of a yield ceiling means it can hold stocks approaching high-payout-ratio territory, which may signal less room for future growth.
- Lower beta. Both funds trade with betas below 0.85, meaning they lag broad equities in strong bull markets; DGRO's beta of 0.78 is even more defensive, which is a feature for some investors but a drag for others.
- Dividend growth assumptions. Both funds assume that past dividend-growth consistency predicts future behavior. Economic downturns or shifts in capital-allocation strategy can break that pattern, especially for funds screened on historical metrics rather than valuation.
- Concentration. DGRO's smaller AUM and more restrictive screening may concentrate holdings more than VIG's broader, lower-criteria index, increasing single-stock or sector risk.
Bottom line
If you prioritize sustainable, reinvestment-focused dividend growth and want to avoid the highest-yielding stocks, DGRO's stricter screening appeals. If you want the broadest, most liquid, lowest-cost entry into proven dividend growers with minimal restrictions, VIG's size, age, and fee advantage stand out. Neither is objectively "better" — the choice hinges on whether you value screening discipline (DGRO) or simplicity and scale (VIG). Past dividend growth doesn't guarantee future results in either fund.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
