FDVV vs. VYM: Same Dividend Focus, Very Different Sector Bets

The Fidelity High Dividend ETF (NYSEMKT:FDVV) could entreaty to investors seeking a technology-tilted income strategy, portion the Vanguard High Dividend Yield ETF (NYSEMKT:VYM) remains a lower-cost, broader-market alternate for income-focused portfolios.

Both exchange-traded funds people high-yielding U.S. equities, yet they supply antithetic hazard exposures. While VYM tracks a accepted scale of established dividend payers, FDVV utilizes sector-specific tilts that effect successful a importantly antithetic portfolio creation and maturation illustration for income-seeking investors.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Vanguard money is the much affordable enactment with a 0.04% disbursal ratio, portion the Fidelity money charges 0.15%. However, FDVV offers a higher trailing-12-month dividend output of 2.80% compared to 2.30% for VYM.

Performance & hazard examination

What's wrong

The Fidelity High Dividend ETF targets higher comparative yields with a tech-forward strategy, allocating 26% of its portfolio to technology, 18% to fiscal services, and 15% to user cyclicals. This 112-holding portfolio, which has nary circumstantial scale tracked, includes largest positions specified arsenic Nvidia (NASDAQ:NVDA) astatine 6.73%, Apple (NASDAQ:AAPL) astatine 5.35%, and Microsoft (NASDAQ:MSFT) astatine 4.41%. Launched successful 2016, the money has paid $1.66 per stock implicit the trailing 12 months.

The Vanguard High Dividend Yield ETF provides a much accepted value-oriented premix crossed 623 holdings, starring with fiscal services astatine 20%, exertion astatine 15%, and healthcare astatine 13%. Its largest positions see Broadcom (NASDAQ:AVGO) astatine 6.28%, JPMorgan (NYSE:JPM) astatine 3.27%, and Exxon Mobil (NYSE:XOM) astatine 3.15%. Launched successful 2006, the Vanguard money has a trailing-12-month dividend of $3.51 per stock and exhibits little humanities volatility than its Fidelity counterpart.

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What this means for investors

Dividend-paying stocks beryllium astatine the bosom of countless portfolios, but not each dividend funds are sportfishing successful the aforesaid pond. FDVV uses a forward-looking surface that evaluates expected dividend growth, which is wherefore Nvidia, Apple, and Microsoft onshore among its apical holdings alongside accepted income names. VYM takes a much classical approach, tracking a wide scale of the highest-yielding U.S. stocks, wherever financials, energy, and healthcare bash astir of the dense lifting.