Fidelity High Dividend ETF (FDVV): A Tier Two ETF

As investors move from Tier One into Tier Two, something begins to change.

Growth is still incredibly important.

But now we also want the portfolio to begin producing more meaningful income.

That's where the Fidelity High Dividend ETF (FDVV) fits beautifully.

Rather than simply chasing the highest-yielding stocks available, FDVV seeks to build a portfolio of established companies that combine attractive dividend yields with strong business fundamentals.

For a Tier Two DGI Crabber, that's exactly the balance I'm looking for.

Key Statistics

• Ticker: FDVV
• Tier: Tier Two
• Investment Style: U.S. High Dividend Equity
• Fund Inception: September 12, 2016
• Expense Ratio: 0.15%
• Number of Holdings: Approximately 110
• Investment Objective: High current dividend income with the potential for capital appreciation

FDVV uses a rules-based process that emphasizes companies offering attractive dividend yields while also considering factors such as dividend sustainability and overall company quality.

Why FDVV Fits Tier Two

Tier Two is designed for investors who have moved beyond the earliest stages of wealth accumulation but still have many years before retirement.

The goal is to continue compounding wealth while allowing the portfolio to produce a growing stream of dividend income.

Across my Tier Two portfolio, I'm generally looking for:

• A dividend yield between approximately 2% and 4%
• Annual dividend growth around 7% to 8%

FDVV naturally leans toward the upper end of that income range.

It provides more current income than SCHG or VIG while still investing in many financially strong, established companies.

That's exactly the role I want a Tier Two ETF to play.

What Does FDVV Own?

One of the things I appreciate about FDVV is that many of its holdings are already familiar to DGI Crabbers.

Companies like Microsoft (MSFT), JPMorgan Chase (JPM), The Home Depot (HD), Coca-Cola (KO), Procter & Gamble (PG), Altria (MO), Bank of America, and Broadcom (AVGO) all appear among the fund's larger holdings. Several of these companies are also featured throughout my 50-stock series because they've demonstrated strong businesses and a commitment to rewarding shareholders.

Instead of selecting individual companies one at a time, FDVV gives investors immediate exposure to more than one hundred dividend-paying businesses through a single investment.

Why I Like FDVV

The biggest reason I like FDVV is that it doesn't simply chase yield.

There are plenty of ETFs that buy the highest-yielding stocks they can find.

That isn't my philosophy.

FDVV attempts to strike a balance by emphasizing companies with attractive dividend yields while still paying attention to business quality and dividend sustainability.

That's an important distinction.

A higher dividend yield only matters if the business behind it remains healthy.

Who Is This ETF For?

FDVV is ideal for investors who:

• Are building a Tier Two portfolio.
• Want more current income than traditional dividend growth ETFs.
• Still value owning financially strong businesses.
• Prefer broad diversification.
• Want a simple way to increase portfolio income without abandoning long-term growth.

I also think FDVV pairs exceptionally well with individual Tier Two stocks.

It provides instant diversification while allowing investors to build larger positions in their favorite companies whenever attractive valuations appear.

A Step Toward Income

One of the reasons FDVV belongs in Tier Two instead of Tier Three is that it represents a natural transition.

You're no longer focused exclusively on maximizing growth.

But you're also not trying to maximize income at all costs.

Instead, you're gradually increasing your portfolio's dividend stream while continuing to own companies capable of growing earnings and rewarding shareholders over time.

That's exactly where FDVV shines.

It helps bridge the gap between aggressive growth investing and retirement-focused income investing.

Final Thoughts from the DGI Crab

FDVV offers something many investors are looking for as their portfolios mature.

Meaningful current income. Broad diversification. Established businesses. And the opportunity for continued long-term growth.

For a Tier Two DGI Crabber, it serves as an excellent complement to ETFs like SCHG, VIG, and DGRO while helping the portfolio begin generating a larger stream of dividend income.

Sometimes successful investing isn't about making dramatic changes.

It's about making thoughtful transitions.

That's exactly why FDVV has earned its place as one of my favorite Tier Two ETFs.