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Is Fidelity High Dividend ETF (FDVV) a Strong ETF Right Now?
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Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV - Free Report) provides investors broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Fidelity. It has amassed assets over $539.44 million, making it one of the largest ETFs in the Style Box - All Cap Value. FDVV seeks to match the performance of the Fidelity Core Dividend Index before fees and expenses.
The Fidelity Core Dividend Index is designed to reflect the performance of stocks of large and mid-capitalization dividend-paying companies that are expected to continue to pay and grow their dividends.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FDVV are 0.29%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.75%.
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.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.62% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Procter + Gamble Co/the (PG - Free Report) .
Its top 10 holdings account for approximately 31.01% of FDVV's total assets under management.
Performance and Risk
Year-to-date, the Fidelity High Dividend ETF has lost about -11.44% so far, and is down about -3.08% over the last 12 months (as of 10/07/2020). FDVV has traded between $19.70 and $33.45 in this past 52-week period.
The fund has a beta of 1.03 and standard deviation of 22.28% for the trailing three-year period. With about 119 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) tracks NASDAQ US Dividend Achievers 50 Index and the iShares Core SP U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Invesco High Yield Equity Dividend Achievers ETF has $638.24 million in assets, iShares Core SP U.S. Value ETF has $6.71 billion. PEY has an expense ratio of 0.53% and IUSV charges 0.04%.
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 - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Fidelity High Dividend ETF (FDVV) a Strong ETF Right Now?
Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV - Free Report) provides investors broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Fidelity. It has amassed assets over $539.44 million, making it one of the largest ETFs in the Style Box - All Cap Value. FDVV seeks to match the performance of the Fidelity Core Dividend Index before fees and expenses.
The Fidelity Core Dividend Index is designed to reflect the performance of stocks of large and mid-capitalization dividend-paying companies that are expected to continue to pay and grow their dividends.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FDVV are 0.29%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.75%.
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.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.62% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Procter + Gamble Co/the (PG - Free Report) .
Its top 10 holdings account for approximately 31.01% of FDVV's total assets under management.
Performance and Risk
Year-to-date, the Fidelity High Dividend ETF has lost about -11.44% so far, and is down about -3.08% over the last 12 months (as of 10/07/2020). FDVV has traded between $19.70 and $33.45 in this past 52-week period.
The fund has a beta of 1.03 and standard deviation of 22.28% for the trailing three-year period. With about 119 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) tracks NASDAQ US Dividend Achievers 50 Index and the iShares Core SP U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Invesco High Yield Equity Dividend Achievers ETF has $638.24 million in assets, iShares Core SP U.S. Value ETF has $6.71 billion. PEY has an expense ratio of 0.53% and IUSV charges 0.04%.
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 - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.