VYM vs. FDVV: How These Popular Dividend ETFs Stack Up on Yield, Costs, and Risk
Key Points
VYM costs less and holds a much broader basket of stocks than FDVV.
FDVV delivers a higher dividend yield and is more concentrated in technology.
VYM has seen lower volatility and a shallower drawdown over the past five years.
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Both the Vanguard High Dividend Yield ETF (NYSEMKT:VYM) and the Fidelity High Dividend ETF (NYSEMKT:FDVV) aim to provide exposure to U.S. companies with above-average dividend yields, but they approach this goal in different ways.
FDVV uses a sector-constrained approach, while VYM tracks a broad, rules-based index of high-yielding stocks -- resulting in some notable differences in cost, portfolio makeup, and risk characteristics. Here's how the two funds stack up.
Snapshot (cost & size)
| Metric | FDVV | VYM |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Expense ratio | 0.15% | 0.06% |
| 1-yr return (as of Dec. 18, 2025) | 10.62% | 9.99% |
| Dividend yield | 3.02% | 2.42% |
| Beta (5Y monthly) | 0.82 | 0.74 |
| AUM | $7.7 billion | $84.6 billion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
VYM is more affordable on fees, charging a much lower expense ratio. FDVV, however, offers a higher dividend payout, which may appeal to those prioritizing income over cost savings.
Performance & risk comparison
| Metric | FDVV | VYM |
|---|---|---|
| Max drawdown (5 y) | -20.17% | -15.87% |
| Growth of $1,000 over 5 years | $1,754 | $1,567 |
What's inside
VYM tracks the FTSE High Dividend Yield Index and holds 566 stocks. Its largest sector exposures are financial services (21% of total assets), technology (18%), and healthcare (13%), with top holdings including Broadcom, JPMorgan Chase, and Exxon Mobil. The fund’s passive, full-replication approach aims for consistent tracking.
FDVV, by contrast, concentrates more heavily in technology (26%) and consumer defensive (12%) stocks, with just 107 holdings. Its top positions are Nvidia, Microsoft, and Apple. FDVV’s methodology seeks higher yield through sector tilts, which can lead to more concentrated bets but also higher payout potential.
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What this means for investors
VYM and FDVV have experienced similar one- and five-year total returns, but they do have notable differences in fee structure, dividend payout, and overall risk.
FDVV offers the higher of the two dividend yields, at 3.02% compared to VYM's 2.42%. For investors seeking the highest possible dividend payout, FDVV has the clear edge.
That said, its higher expense ratio (0.15% compared to 0.06%) will eat away at some of that income. In terms of take-home earnings, after accounting for fees, these two funds will likely be fairly similar for most investors.
The other major difference between them is sector allocation and risk. While VYM is primarily focused on financial services stocks, FDVV leans more heavily into the tech sector. Tech stocks can be more volatile, especially in the short term, as seen with FDVV's higher beta and steeper drawdown over the last five years.
The tech sector can also be lucrative, but whether it's a risk you're willing to take will depend on your preferences and investing goals. FDVV has the potential for greater returns, but for those looking for more stability, VYM's more subtle tilt toward tech stocks could be preferable.
Glossary
ETF: Exchange-traded fund; a basket of securities traded on an exchange like a stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges its shareholders.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, shown as a percentage.
Sector-constrained approach: A strategy that limits how much a fund can invest in any single industry sector.
Beta: A measure of a fund's volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a given period.
Full-replication approach: A fund management method where all securities in an index are purchased in the same proportions as the index.
Ex-dividend date: The cutoff date to be eligible for the next dividend payment; investors must own shares before this date.
Sector tilt: When a fund allocates more assets to certain sectors than the broader market or its benchmark.
Passive management: A fund strategy that aims to match the performance of a specific index, not outperform it.
FTSE High Dividend Yield Index: A stock index tracking U.S. companies with above-average dividend yields, used as a benchmark by some funds.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Microsoft, Nvidia, and Vanguard Whitehall Funds - Vanguard High Dividend Yield ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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