FDVV - FDVV: Lack Of Clear Focus Makes This A Subpar Choice

2024-04-08 12:46:17 ET

Summary

• The Fidelity High Dividend ETF, on the surface, focuses on large and mid-cap companies with attractive and growing dividends.
• It assesses investments based on dividend yield, payout ratio, and dividend growth that should provide a combination of enticing yield and dividend predictability.
• Yet, assessing the ETF more thoroughly and looking at the historical data it is clear that FDVV fails to deliver both on the above average yield and dividend stability aspect.
• While it has performed well in the recent past (mostly due to the tech focus and having such names as Nvidia in the portfolio), in my opinion, there is a lack of justified basis for why investors should allocate capital here.
• I elaborate on FDVV and explain why, in my view, the ETF is not that enticing.

The Fidelity High Dividend ETF ( FDVV ) is a passive ETF, which focuses on large and mid-cap companies that distribute relatively attractive (on an absolute level) and growing dividends. It has just over $2.5 billion in market cap and from the expense perspective, it is truly cheap - i.e., 0.15% of net expense ratio....

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