FDVV vs. VYM: Same Dividend Focus, Very Different Sector Bets
Key Points
Fidelity High Dividend ETF provides a higher trailing-12-month dividend yield but carries a higher expense ratio than Vanguard High Dividend Yield ETF.
Vanguard High Dividend Yield ETF offers broader diversification compared to the Fidelity fund.
Fidelity High Dividend ETF has a larger concentration in the technology sector while Vanguard High Dividend Yield ETF leans more heavily toward financial services.
The Fidelity High Dividend ETF (NYSEMKT:FDVV) could appeal to investors seeking a technology-tilted income strategy, while the Vanguard High Dividend Yield ETF (NYSEMKT:VYM) remains a lower-cost, broader-market alternative for income-focused portfolios.
Both exchange-traded funds target high-yielding U.S. equities, yet they provide different risk exposures. While VYM tracks a traditional index of established dividend payers, FDVV utilizes sector-specific tilts that result in a significantly different portfolio composition and growth profile for income-seeking investors.
Snapshot (cost & size)
| Metric | VYM | FDVV |
|---|---|---|
| Issuer | Vanguard | Fidelity |
| Expense ratio | 0.04% | 0.15% |
| 1-yr return (as of April 27, 2026) | 28.60% | 26.80% |
| Dividend yield | 2.30% | 2.80% |
| Beta | 0.72 | 0.86 |
| AUM | $88.8 billion | $8.5 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is the more affordable option with a 0.04% expense ratio, while the Fidelity fund charges 0.15%. However, FDVV offers a higher trailing-12-month dividend yield of 2.80% compared to 2.30% for VYM.
Performance & risk comparison
| Metric | VYM | FDVV |
|---|---|---|
| Max drawdown (5 yr) | (15.80%) | (20.20%) |
| Growth of $1,000 over 5 years (total return) | $1,735 | $1,872 |
What's inside
The Fidelity High Dividend ETF targets higher relative yields with a tech-forward strategy, allocating 26% of its portfolio to technology, 18% to financial services, and 15% to consumer cyclicals. This 112-holding portfolio, which has no specific index tracked, includes largest positions such as Nvidia (NASDAQ:NVDA) at 6.73%, Apple (NASDAQ:AAPL) at 5.35%, and Microsoft (NASDAQ:MSFT) at 4.41%. Launched in 2016, the fund has paid $1.66 per share over the trailing 12 months.
The Vanguard High Dividend Yield ETF provides a more traditional value-oriented mix across 623 holdings, leading with financial services at 20%, technology at 15%, and healthcare at 13%. Its largest positions include Broadcom (NASDAQ:AVGO) at 6.28%, JPMorgan (NYSE:JPM) at 3.27%, and Exxon Mobil (NYSE:XOM) at 3.15%. Launched in 2006, the Vanguard fund has a trailing-12-month dividend of $3.51 per share and exhibits lower historical volatility than its Fidelity counterpart.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Dividend-paying stocks sit at the heart of countless portfolios, but not all dividend funds are fishing in the same pond. FDVV uses a forward-looking screen that evaluates expected dividend growth, which is why Nvidia, Apple, and Microsoft land among its top holdings alongside traditional income names. VYM takes a more classical approach, tracking a broad index of the highest-yielding U.S. stocks, where financials, energy, and healthcare do most of the heavy lifting.
FDVV offers a higher headline yield than VYM, but its higher fee quietly closes that gap for long-term holders. After accounting for costs, the income difference between them shrinks considerably, meaning the more meaningful distinction is really about what you're comfortable owning.
VYM's 623 holdings and traditional sector mix make it the steadier, more predictable choice for income-focused investors who want dividend exposure without the volatility that comes with a heavy tech tilt. FDVV suits investors who want dividend income without abandoning the growth potential of the modern technology sector.
Should you buy stock in Fidelity Covington Trust - Fidelity High Dividend ETF right now?
Before you buy stock in Fidelity Covington Trust - Fidelity High Dividend ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fidelity Covington Trust - Fidelity High Dividend ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $497,606!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,306,846!*
Now, it’s worth noting Stock Advisor’s total average return is 985% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 29, 2026.
JPMorgan Chase is an advertising partner of Motley Fool Money. Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Broadcom, JPMorgan Chase, Microsoft, Nvidia, and Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.
Recommended Articles
Comments (0)
Click the $ button, enter the symbol, and select to link a stock, ETF, or other ticker.