Can You Trust THIS Dividend ETF? FDVV vs SCHD

It's a Trap! I've noticed the Fidelity High Dividend ETF, the FDVV, getting a lot of attention lately with its 35% return but is it all you think? I'll compare the FDVV against the SCHD Dividend Fund and show you why I'm only buying one of these ETFs. ✅ Get your FREE bond and earn 7% interest with WorthyBonds and this exclusive offer mystockmarketb...
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You know we love us some Schwab Dividend Equity ETF, the SCHD, for those quality companies putting cash in your pocket but I’ve noticed the Fidelity High Dividend ETF (FDVV) has been appearing in the comments A LOT lately. Of course, anything labeled ‘High Dividend’ must be a sure thing so I decided to look into it and realized…it’s not a dividend ETF! At least, not in the way most investors think. I’ll compare the two dividend funds, reveal why the FDVV is a growth stock masquerading as a dividend ETF and which to buy.
Launched in 2016, it’s not exactly an upstart but has never gotten this kind of investor attention…until now. For example, the SCHD dividend ETF is the second-most popular dividend fund with $64 billion in assets, second only to the Vanguard Dividend Appreciation ETF (VIG) with $87 billion in assets. You have to go all the way down to the 22nd fund by assets at just $3.8 billion to find the FDVV and that’s only after a giant increase in assets over the last year.
And it’s easy to see why. Along with its 2.8% dividend yield, the FDVV ETF has produced a 35% return over the last year and has doubled in price since its inception. While the dividend is lower than the 3.5% you get on the SCHD that return has beaten the Schwab fund which is only up 24% over the year.
Is it time to start shifting assets from the SCHD into Fidelity’s FDVV? Is there a new investor favorite for dividend ETFs? I decided to dig into the Fidelity fund and what I found surprised and worried me…in fact, I think investors are getting tricked into this fund.
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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through dividend stocks, investing and ways to make more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.
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