Fidelity High Dividend ETF (FDVV) offers a higher yield and better recent performance compared to Vanguard Dividend Appreciation ETF (VIG). VIG has lower costs, a broader portfolio, and far greater assets under management. Both ETFs focus on dividend-oriented U.S. stocks, but their approaches and portfolios differ, appealing to different investor preferences.

FDVV has a higher expense ratio at 0.15%, while VIG is more affordable at 0.05%. FDVV’s yield is 3.02%, significantly higher than VIG’s 1.59%. Both ETFs emphasize technology, but FDVV has a larger tilt towards consumer defensive stocks, affecting risk and income characteristics.

VIG tracks 338 large-cap U.S. companies with a history of raising dividends, including technology, financial services, and healthcare sectors. FDVV holds 119 stocks with a tilt towards technology, financial services, and consumer defensive sectors. FDVV’s exposure to consumer defensives may influence risk and income differently.

Since 2016, FDVV has outperformed VIG, more than doubling since 2021. However, much of FDVV’s outperformance is attributed to its largest position, Nvidia, which has been a significant performer over the last five years. The performance difference between the two ETFs may be closer than the numbers suggest.

VIG’s dividend yield is half of FDVV’s at 1.59%, and VIG has only grown its payouts by 9% annually over the last five years, while FDVV has delivered 10% growth. Investor preferences play a significant role in choosing between the two ETFs, with each offering different benefits and risks based on sector exposure and dividend growth.

For more information on ETF investing and understanding key metrics like expense ratio, dividend yield, and beta, check out the full guide provided in the article. Investors can make informed decisions by analyzing these metrics and understanding how they impact the performance and risk profile of ETFs.

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Josh Kohn-Lindquist has positions in Nvidia, while The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Dividend Appreciation ETF. The Motley Fool recommends other options and has a disclosure policy. “Vanguard vs. Fidelity: Is VIG or FDVV the Better Dividend ETF to Buy?” provides valuable insights for investors considering these ETFs.

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