Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Fidelity High Dividend ETF (FDVV) is a smart beta exchange traded fund launched on 09/12/2016.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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
FDVV is managed by Fidelity, and this fund has amassed over $5.21 billion, which makes it one of the largest ETFs in the Style Box - All Cap Value. FDVV seeks to match the performance of the Fidelity Core Dividend Index before fees and expenses.
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.
Annual operating expenses for FDVV are 0.16%, which makes it one of the cheaper products in the space.
FDVV's 12-month trailing dividend yield is 2.98%.
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.
Representing 25.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Consumer Staples round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 5.45% of total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).
The top 10 holdings account for about 31.11% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity High Dividend ETF has added about 2.78% so far, and it's up approximately 12.24% over the last 12 months (as of 06/04/2025). FDVV has traded between $43.60 and $52.63 in this past 52-week period.
The ETF has a beta of 0.90 and standard deviation of 15.75% for the trailing three-year period. With about 123 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.
Capital Group Dividend Value ETF (CGDV) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Capital Group Dividend Value ETF has $16.81 billion in assets, iShares Core S&P U.S. Value ETF has $20.16 billion. CGDV has an expense ratio of 0.33% 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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Fidelity High Dividend ETF (FDVV): ETF Research Reports Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report iShares Core S&P U.S. Value ETF (IUSV): ETF Research Reports Capital Group Dividend Value ETF (CGDV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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