Which High Dividend ETF Is Better, Vanguard's VYM or Fidelity's FDVV?
Key Points
The Vanguard High Dividend Yield ETF offers a lower expense ratio and larger assets under management (AUM) than the Fidelity High Dividend ETF.
The Fidelity High Dividend ETF provides a higher trailing dividend yield but maintains a more concentrated portfolio with higher technology exposure.
The Vanguard High Dividend Yield ETF has shown lower price volatility and a smaller maximum drawdown over the past five years.
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The Vanguard High Dividend Yield ETF (NYSEMKT:VYM) offers a lower-cost, diversified approach to income, while the Fidelity High Dividend ETF (NYSEMKT:FDVV) provides a higher dividend yield through a more concentrated, tech-oriented portfolio.
Both ETFs cater to investors seeking regular cash flow from equities, yet they employ different index strategies. VYM focuses on broad exposure to high-yield U.S. stocks, whereas FDVV targets higher income potential by applying specific sector weightings based on historical yield performance.
Snapshot (cost & size)
| Metric | FDVV | VYM |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Expense ratio | 0.15% | 0.04% |
| 1-yr return (as of June 18, 2026) | 23.20% | 25.30% |
| Dividend yield | 2.69% | 2.20% |
| Beta | 0.86 | 0.73 |
| Assets under management (AUM) | $9.8 billion | $96.1 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 significantly more affordable with an expense ratio of 0.04%. While its 2.20% yield is respectable, FDVV is higher at 2.69%, which may appeal to investors prioritizing immediate income over the lowest possible fees.
Performance & risk comparison
| Metric | FDVV | VYM |
|---|---|---|
| Max drawdown (5 yr) | (20.20%) | (15.80%) |
| Growth of $1,000 over 5 years (total return) | $1,951 | $1,796 |
What's inside
The Vanguard High Dividend Yield ETF holds 589 positions and tracks an index of companies with generous payouts. Its largest positions include Broadcom (NASDAQ:AVGO) at 8.52%, JPMorgan Chase & Co. (NYSE:JPM) at 3.15%, and Exxon Mobil (NYSE:XOM) at 2.53%. The fund primarily spreads assets across technology (20%), financial services (20%), and healthcare (12%). It was launched in 2006 and has a trailing-12-month dividend of $4.49 per share.
In contrast, the Fidelity High Dividend ETF maintains a more concentrated portfolio of 119 holdings. Its largest positions include Nvidia (NASDAQ:NVDA) at 6.84%, Apple (NASDAQ:AAPL) at 6.04%, and Microsoft (NASDAQ:MSFT) at 4.07%. It takes a more aggressive sector approach, with technology representing 31% of the fund, followed by financial services at 17% and consumer cyclical at 14%. It was launched in 2016 and paid $2.18 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Investors looking for dividend income can find it in the Vanguard High Dividend Yield ETF (VYM) and Fidelity High Dividend ETF (FDVV). Which one to invest in depends on which fund’s strategy aligns better with your investment goals.
FDVV targets large and mid-cap dividend-paying companies that are expected to continue to pay and grow their dividends. This has enabled the fund to deliver a higher dividend yield.
Its much larger slice of the technology sector means greater volatility than VYM. However, FDVV’s approach provides a blend of passive income and capital appreciation, since tech stocks have been on fire thanks to investor enthusiasm for businesses focused on artificial intelligence. This strategy may appeal to investors who want to maximize returns in exchange for higher risk.
VYM seeks stocks sporting higher than average dividend yields. This strategy means it looks broadly for dividend stocks, resulting in a larger number of holdings. Consequently, the fund delivers better diversification for your portfolio, which helps to offset any downturns in a particular sector.
Also, VYM has a far higher AUM, providing greater liquidity. This attribute means tighter bid-ask spreads, reducing costs on every transaction. Combined with a low expense ratio, which Vanguard reduced from its average of 0.06% this year, VYM is a good ETF for conservative investors who want to buy and hold for the long term.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Robert Izquierdo has positions in Apple, Broadcom, JPMorgan Chase, 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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