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Is Fidelity High Dividend ETF (FDVV) a Hot 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 Total Market (U.S.) ETFs category of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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
Managed by Fidelity, FDVV has amassed assets over $202.63 M, making it one of the average sized ETFs in the Total Market (U.S.) ETFs. This particular fund 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
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 3.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FDVV, it has heaviest allocation in the Financials sector --about 22.60% of the portfolio --while Information Technology and Energy round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.96% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and Microsoft Corp (MSFT - Free Report) .
FDVV's top 10 holdings account for about 29.49% of its total assets under management.
Performance and Risk
So far this year, FDVV has added about 9.20%, and it's up approximately 17.32% in the last one year (as of 09/27/2018). During this past 52-week period, the fund has traded between $27.08 and $31.10.
The fund has a beta of 0.83 and standard deviation of 9.79% for the trailing three-year period. With about 112 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend ETF is a reasonable option for investors seeking to outperform the Total Market (U.S.) ETFs 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 $769.82 M in assets, iShares Core S&P U.S. Value ETF has $4.64 B. PEY has an expense ratio of 0.54% 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 Total Market (U.S.) ETFs.
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 Hot 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 Total Market (U.S.) ETFs category of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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
Managed by Fidelity, FDVV has amassed assets over $202.63 M, making it one of the average sized ETFs in the Total Market (U.S.) ETFs. This particular fund 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
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 3.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FDVV, it has heaviest allocation in the Financials sector --about 22.60% of the portfolio --while Information Technology and Energy round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.96% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and Microsoft Corp (MSFT - Free Report) .
FDVV's top 10 holdings account for about 29.49% of its total assets under management.
Performance and Risk
So far this year, FDVV has added about 9.20%, and it's up approximately 17.32% in the last one year (as of 09/27/2018). During this past 52-week period, the fund has traded between $27.08 and $31.10.
The fund has a beta of 0.83 and standard deviation of 9.79% for the trailing three-year period. With about 112 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend ETF is a reasonable option for investors seeking to outperform the Total Market (U.S.) ETFs 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 $769.82 M in assets, iShares Core S&P U.S. Value ETF has $4.64 B. PEY has an expense ratio of 0.54% 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 Total Market (U.S.) ETFs.
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.