Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (
FDVV Quick Quote FDVV - Free Report) provides investors broad exposure to the Style Box - All Cap Value category of the market. What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.05 billion, this makes it one of the largest ETFs in the Style Box - All Cap Value. FDVV is managed by Fidelity. This particular fund, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for FDVV are 0.29%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.66%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
FDVV's heaviest allocation is in the Information Technology sector, which is about 21.90% of the portfolio. Its Financials and Real Estate round out the top three.
When you look at individual holdings, Apple Inc Common Stock Usd.00001 (
AAPL Quick Quote AAPL - Free Report) accounts for about 4.76% of the fund's total assets, followed by Microsoft Corp Common Stock Usd.00000625 ( MSFT Quick Quote MSFT - Free Report) and Jpmorgan Chase + Co Common Stock Usd1.0 ( JPM Quick Quote JPM - Free Report) .
Its top 10 holdings account for approximately 26.38% of FDVV's total assets under management.
Performance and Risk
So far this year, FDVV has added roughly 21.89%, and is up about 41.68% in the last one year (as of 08/03/2021). During this past 52-week period, the fund has traded between $26.81 and $38.45.
The fund has a beta of 1.06 and standard deviation of 22.79% for the trailing three-year period. With about 123 holdings, it effectively diversifies company-specific risk.
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.
Dimensional U.S. Targeted Value ETF (
DFAT Quick Quote DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF ( IUSV Quick Quote IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $5.85 billion in assets, iShares Core S&P U.S. Value ETF has $10.49 billion. DFAT has an expense ratio of 0.34% 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.
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.