Which Dividend ETF Is Better: Vanguard's Larger Portfolio or Fidelity's Higher Growth?
Key Points
Vanguard High Dividend Yield ETF offers a lower expense ratio and larger assets under management than Fidelity High Dividend ETF.
Fidelity High Dividend ETF leans significantly into technology and has generated higher five-year total growth.
Vanguard High Dividend Yield ETF maintains a more conservative beta profile and contains a much broader portfolio of 589 holdings.
Both the Fidelity High Dividend ETF (NYSEMKT:FDVV) and the Vanguard High Dividend Yield ETF (NYSEMKT:VYM) target income but take different paths. While VYM tracks a broad index of high-yielding stocks, FDVV uses a proprietary model to find companies with strong dividend potential and specific sector constraints. This results in distinct performance and risk profiles for income-focused portfolios.
Snapshot (cost & size)
| Metric | FDVV | VYM |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Expense ratio | 0.15% | 0.04% |
| 1-yr return (as of 5/18/26) | 20.65% | 23.6% |
| Dividend yield | 2.8% | 2.3% |
| Beta | 0.81 | 0.73 |
| AUM | $9.2 billion | $94.6 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.
Vanguard is the more affordable option with a 0.04% expense ratio, while Fidelity charges 0.15%. However, Fidelity currently provides a higher payout with a trailing-12-month dividend yield of 2.8% versus 2.3% for the Vanguard fund.
Performance & risk comparison
| Metric | FDVV | VYM |
|---|---|---|
| Max drawdown (5 yr) | (20.17%) | (15.87%) |
| Growth of $1,000 over 5 years (total return) | $1,863 | $1,704 |
What's inside
The Vanguard High Dividend Yield ETF provides exposure to around 600 holdings, primarily in financial services at 20%, technology at 15%, and industrials at 14%. Its largest positions include Broadcom at 8%, JPMorgan Chase at 3.33%, and ExxonMobil at 2.71%. Launched in 2006, it has a trailing-12-month dividend of $3.51 per share.
In contrast, the Fidelity High Dividend ETF is more concentrated with about 110 holdings and leans heavily into technology at 29%, financial services at 19%, and consumer cyclical at 14%. Top holdings include Nvidia at 7%, Apple at 5.7%, and Microsoft at 4.5%. Launched in 2016, the Fidelity fund has a trailing-12-month dividend of $1.66 per share.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
Income investors typically focus on investments that pay them while they hold, not just when they sell their stocks, and dividends are often a good way to achieve that goal. But not all dividend ETFs are built the same, and investors may need to decide what characteristics matter to them more in an investment.
With its tech tilt, the Fidelity High Dividend ETF may appeal to growth-oriented investors, although its concentration also lends itself to a greater max drawdown over the last five years. And while it offers a slightly higher dividend than the Vanguard High Dividend Yield ETF, it also charges a slightly higher expense ratio, which could eat into some of those gains.
The Vanguard High Dividend Yield ETF offers a lower-cost, broader value play, with about 10 times the total assets under management as the Fidelity ETF and a greater allocation to financial services. Financials tend to be a defensive investment play and typically offer both dividend income and growth potential, though investors may miss out on some of the artificial intelligence-driven rally that has propelled the market in recent years.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Apple, Microsoft, Nvidia, and Vanguard High Dividend Yield ETF. 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.
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