iShares Core High Dividend ETF (NYSEMKT:HDV) offers low-cost exposure to defensively priced stocks, while Fidelity High Dividend ETF (NYSEMKT:FDVV) emphasizes growth-oriented technology stocks to generate income.
The iShares Core High Dividend ETF and the Fidelity High Dividend ETF both target income-seeking investors but follow different philosophical paths. This comparison explores how their sector bias and volatility profiles differ for long-term holders.
Snapshot (cost and size)
Beta measures price volatility relative to the S&P 500; Beta is calculated from five-year monthly returns. 1-year returns represent the total returns over the last 12 months. Dividend yield is the trailing 12-month distribution yield.
The iShares fund is the more affordable option with an expense ratio of 0.08%, while the Fidelity fund charges 0.15%. Both ETFs currently offer the same trailing-12-month distribution yield of 2.80%.
Performance and risk comparison
The Fidelity High Dividend ETF uses a sector-weighting strategy to enhance income, creating a tech-heavy portfolio. Its largest positions include NVIDIA (NASDAQ:NVDA) at 6.65%, Apple (NASDAQ:AAPL) at 6.05%, and Microsoft (NASDAQ:MSFT) at 4.15%. The fund holds 119 stocks and is based on 31% technology, 17% financial services and 14% consumer cyclicals. It was launched in 2016. The Fidelity High Dividend ETF paid $1.73 per share over the last 12 months, which equates to a 2.80% yield on its recent ~$61 share price.
The iShares Core High Dividend ETF mimics an index of US companies with sustainable high dividends. This leaves the defensive posture focused on consumer defensive at 25%, healthcare at 23% and energy at 20%. Its largest positions include exxon mobil (NYSE:XOM) at 7.24%, AbbVie (NYSE:ABBV) at 6.47%, and beam (NYSE:CVX) at 5.41%. It manages 75 holdings and was launched in 2011. The iShares Core High Dividend ETF paid $0.79 per share over the last 12 months, which equates to a 2.80% yield on its recent ~$27 share price.
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What does this mean for investors
Investing in high dividend paying stocks is a major component of a portfolio’s overall returns. The Fidelity High Dividend ETF (FDVV) and the iShares Core High Dividend ETF (HDV) provide an efficient way to achieve this goal. Deciding between the two depends on whether you prefer the more conservative approach of HDV or the higher volatility of FDV in exchange for the potential for higher total returns.