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Is Fidelity High Dividend ETF (FDVV) a Strong ETF Right Now?
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The Fidelity High Dividend ETF (FDVV - Free Report) was launched on 09/12/2016, and is a smart beta exchange traded fund designed to offer 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is managed by Fidelity. FDVV has been able to amass assets over $2.75 billion, making it one of the largest ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Fidelity Core Dividend Index.
The Fidelity High Dividend Index reflects the performance of stocks of large and mid-capitalization high-dividend-paying companies that are expected to continue to pay and grow their dividends.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.15% for FDVV, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 29.60% of the portfolio. Its Financials and Industrials round out the top three.
When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 5.80% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 28.16% of total assets under management.
Performance and Risk
The ETF has added roughly 11.55% and was up about 26.47% so far this year and in the past one year (as of 05/22/2024), respectively. FDVV has traded between $37.10 and $46.79 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 15.56% for the trailing three-year period. With about 118 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $10.04 billion in assets, iShares Core S&P U.S. Value ETF has $17.47 billion. DFAT has an expense ratio of 0.28% 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?
The Fidelity High Dividend ETF (FDVV - Free Report) was launched on 09/12/2016, and is a smart beta exchange traded fund designed to offer 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is managed by Fidelity. FDVV has been able to amass assets over $2.75 billion, making it one of the largest ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Fidelity Core Dividend Index.
The Fidelity High Dividend Index reflects the performance of stocks of large and mid-capitalization high-dividend-paying companies that are expected to continue to pay and grow their dividends.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.15% for FDVV, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 29.60% of the portfolio. Its Financials and Industrials round out the top three.
When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 5.80% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 28.16% of total assets under management.
Performance and Risk
The ETF has added roughly 11.55% and was up about 26.47% so far this year and in the past one year (as of 05/22/2024), respectively. FDVV has traded between $37.10 and $46.79 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 15.56% for the trailing three-year period. With about 118 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $10.04 billion in assets, iShares Core S&P U.S. Value ETF has $17.47 billion. DFAT has an expense ratio of 0.28% 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.