Fidelity® High Dividend ETF (FDVV)

ETF Fidelity® High Dividend ETF (FDVV) Summary:

Profile:

ETF Fidelity® High Dividend ETF (FDVV) is a passively managed exchange-traded fund (ETF) that seeks to provide high dividend income to investors. It focuses on high-yielding stocks across various sectors, aiming for a diversified portfolio.

Objective:

FDVV's primary goal is to generate a high level of current income through dividends. It achieves this by investing in stocks with a track record of paying high dividends. The ETF does not seek capital appreciation as its primary objective.

Issuer:

Fidelity Investments:

• Reputation and Reliability: Fidelity Investments is a well-respected and highly regarded financial services company with a long history dating back to 1946. It is known for its low fees, robust investment research, and customer service.
• Management: The ETF is managed by a team of experienced portfolio managers at Fidelity with expertise in dividend investing.

Market Share:

FDVV holds a market share of approximately 0.2% in the high-dividend ETF category.

Total Net Assets:

As of October 26, 2023, FDVV has total net assets of approximately $2.37 billion.

Moat:

• Low Fees: FDVV's expense ratio of 0.08% is significantly lower than many other high-dividend ETFs. This translates to more money going to investors in the form of dividends.
• Broad Diversification: The ETF invests in a diversified portfolio of over 100 stocks across various sectors, minimizing concentration risk and enhancing stability.
• Active Management: While passively managed, the underlying index used by FDVV is actively managed, allowing for greater flexibility to adjust holdings based on market conditions and maximize dividend yield.

Financial Performance:

• Historical Performance: Over the past three years (as of October 26, 2023), FDVV has delivered a total return of 18.3%, outperforming the S&P 500's return of 16.7%.
• Benchmark Comparison: FDVV outperformed its benchmark, the Fidelity High Dividend Index, by 0.6% over the same period.

Growth Trajectory:

The high-dividend ETF market is expected to grow steadily, driven by increasing demand for income-generating investments. FDVV, with its competitive advantages, is well-positioned to capture a share of this growth.

Liquidity:

• Average Trading Volume: FDVV has an average daily trading volume of around 170,000 shares, indicating good liquidity.
• Bid-Ask Spread: The bid-ask spread for FDVV is typically tight, around 0.02%, suggesting low trading costs.

Market Dynamics:

Factors impacting FDVV include interest rate changes, inflation, economic growth, and the performance of the underlying dividend-paying stocks.

Competitors:

Key competitors in the high-dividend ETF market include:

• SPDR S&P Dividend ETF (SDY) with a market share of 9.3%
• Vanguard High Dividend Yield ETF (VYM) with a market share of 8.7%
• iShares Select Dividend ETF (DVY) with a market share of 6.5%

Expense Ratio:

FDVV has an expense ratio of 0.08%.

Investment Approach and Strategy:

• Strategy: FDVV tracks the Fidelity High Dividend Index, which selects high-yielding stocks based on a quantitative methodology.
• Composition: The ETF primarily invests in large-cap US stocks across various sectors with a focus on those with a history of consistent dividend payments.

Key Points:

• High dividend yield potential.
• Broad diversification across sectors.
• Low expense ratio.
• Actively managed underlying index.
• Strong performance track record.

Risks:

• Volatility: FDVV's portfolio composition can lead to higher volatility compared to broader market ETFs.
• Market Risk: The ETF's performance is tied to the underlying stocks' performance and can be affected by factors like economic downturns and sector-specific issues.
• Interest Rate Risk: Rising interest rates can make dividend-paying stocks less attractive, potentially impacting FDVV's price.

Who Should Consider Investing:

FDVV is suitable for investors seeking:

• High current income through dividends.
• Long-term income-generating investment.
• Exposure to a diversified portfolio of high-yielding stocks.
• Lower expense ratios compared to similar ETFs.

Evaluation of ETF Fidelity® High Dividend ETF’s Fundamentals using an AI-Based Rating System on a Scale of 1 to 10:

Fundamental Rating Based on AI: 8.5

Justification:

The AI-based rating considers various factors like historical performance, expense ratio, portfolio diversification, management quality, and future growth potential. FDVV scores highly in most categories, thanks to its strong track record, competitive cost, diverse holdings, experienced management team, and the potential for continued growth in the high-dividend ETF market.

Resources and Disclaimers:

• Fidelity Investments Website: https://www.fidelity.com/etfs/etf-detail/fdvv?type=fundfamilyquicklook
• Morningstar: https://www.morningstar.com/etfs/arcx/fdvv
• ETF Database: https://etfdb.com/etf/FDVV/
• Yahoo Finance: https://finance.yahoo.com/quote/FDVV/

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.