EvolutionFreedom
Nov 13, 3:36 PM
Ever noticed
$DGRO doesn't hold the highest-yielding stocks? That's deliberate.
Its index (Morningstar US Dividend Growth) removes the top 10% of yielders first, then asks for at least 5 years of uninterrupted annual dividend growth and a payout ratio under 75%. REITs are left out too.
The thinking: an unusually high yield often means the price has fallen because the market expects a cut, and a payout under 75% leaves room to keep raising it.
The trade-off is a lower starting yield than payout-first funds like
$SPYI or
$QYLD. Income now vs income growth.
Source: Morningstar index rules and the iShares DGRO prospectus, checked 13 Nov 2026.
Not financial advice.
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