1 Unstoppable Dividend ETF Up 10.8% in 2026 to Buy and Hold for the Next 20 Years
One of the biggest fears among investors right now is whether artificial intelligence (AI) will pay off, or if there is an AI bubble that could take down the stock market. The S&P 500 (^GSPC +1.49%) has become top-heavy with tech majors. What if you want to invest your money differently and get away from AI stocks?
Good news: there’s a high-yield dividend ETF that could be a great fit for this defensive strategy. The iShares Core Dividend Growth ETF (DGRO +0.27%) is up about 11% year to date and has delivered an average annual return of 13.5% over the past 10 years.
Let’s look at this dividend ETF and see if it’s a good choice for your investment goals.
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iShares Core Dividend Growth ETF (DGRO): 12 years of 12.4% annualized returns
The iShares Core Dividend Growth ETF holds 390 U.S. companies with a history of dividend growth. This ETF was established in June 2014 and has delivered an average annual return of 12.4% since. In the past year, this fund has returned 20.6%.
iShares Trust – iShares Core Dividend Growth ETF
Today’s Change
(0.27%) $0.21
Current Price
$77.10
Key Data Points
AUM
$43B
Dividend Yield
1.94%
Expense Ratio
0.08%
Top Holdings
AAPL
3.12%
XOM
3.06%
MSFT
3.03%
One good reason for buying DGRO is its dividends. As of Aug. 31, the fund was paying a 30-day SEC Yield of 1.95%, which is competitive with some of the best dividend index funds.
Why buy and hold DGRO for 20 years
Recent research from Vanguard projects that U.S. value stocks are likely to outperform U.S. growth stocks for the next 10 to 30 years. Vanguard’s researchers believe that today’s AI stocks are not going to be the biggest winners of AI in the long run. Instead, the biggest future gains from the AI boom could go to a wider range of companies in other industries beyond tech and today’s AI trade.
The iShares Core Dividend Growth ETF owns many value-oriented stocks of companies that fit that description. There’s no guarantee that Vanguard’s estimates are correct. But if you agree with the general direction of this research, dividend stocks like the ones owned by DGRO could be strong investments for the future.
This fund is not too tech-heavy. Only about 16.7% of its holdings are in the information technology sector. DGRO owns a broad range of companies across sectors, such as healthcare (18.6% of the fund’s holdings), financials (20.7%), and consumer staples (11.8%), which may be less exposed to a potential AI bubble.
Even if the AI trade enters a downturn or there’s a big tech sell-off, the iShares Core Dividend Growth ETF might keep growing. That strategic position, plus the solid dividend yield, could make this ETF a good choice to buy and hold for 20 years.
Ben Gran has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
