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Is Fidelity High Dividend ETF (FDVV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Fidelity High Dividend ETF (FDVV - Free Report) is a smart beta exchange traded fund launched on 09/12/2016.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
FDVV is managed by Fidelity, and this fund has amassed over $755.27 million, which makes it one of the largest ETFs in the Style Box - All Cap Value. FDVV, before fees and expenses, seeks to match the performance of the Fidelity Core Dividend Index.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.86%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 21.90% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Materials round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL - Free Report) accounts for about 5.96% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Procter + Gamble Co/the Common Stock (PG - Free Report) .
Its top 10 holdings account for approximately 28.98% of FDVV's total assets under management.
Performance and Risk
So far this year, FDVV has added about 13.40%, and was up about 60.60% in the last one year (as of 03/18/2021). During this past 52-week period, the fund has traded between $19.70 and $35.88.
FDVV has a beta of 1.06 and standard deviation of 22.69% 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 S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Invesco High Yield Equity Dividend Achievers ETF has $870.04 million in assets, iShares Core S&P U.S. Value ETF has $9 billion. PEY has an expense ratio of 0.52% 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?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Fidelity High Dividend ETF (FDVV - Free Report) is a smart beta exchange traded fund launched on 09/12/2016.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
FDVV is managed by Fidelity, and this fund has amassed over $755.27 million, which makes it one of the largest ETFs in the Style Box - All Cap Value. FDVV, before fees and expenses, seeks to match the performance of the Fidelity Core Dividend Index.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.86%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 21.90% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Materials round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL - Free Report) accounts for about 5.96% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Procter + Gamble Co/the Common Stock (PG - Free Report) .
Its top 10 holdings account for approximately 28.98% of FDVV's total assets under management.
Performance and Risk
So far this year, FDVV has added about 13.40%, and was up about 60.60% in the last one year (as of 03/18/2021). During this past 52-week period, the fund has traded between $19.70 and $35.88.
FDVV has a beta of 1.06 and standard deviation of 22.69% 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 S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Invesco High Yield Equity Dividend Achievers ETF has $870.04 million in assets, iShares Core S&P U.S. Value ETF has $9 billion. PEY has an expense ratio of 0.52% 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.