Comparing VYM and FDVV: So, Which Dividend ETF Gets It Right?

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Okay, so you’ve got these two ETFs-Vanguard’s High Dividend Yield ETF (VYM) and Fidelity’s High Dividend ETF (FDVV). Both are supposed to be like the friendly neighbor offering you a piece of the best dividend pie in the U.S., but of course, nothing is ever as simple as it appears-just like that neighbor’s “small favor” you’re pretty sure is actually a secret invasion plotted over lawn gnomes. VYM and FDVV? Sure, they’re both after the same thing-more income, less stress, hopefully without becoming someone’s personal financial catastrophe-but at the end of the day, they’re like two different departments in the same, slightly dysfunctional company.

FDVV? It’s a sector-constrained show-off, carefully hand-picking its favorite sectors-think of it like a diet where you only eat kale and carrots, ignoring everything else that might make it more interesting. Meanwhile, VYM? It’s more of a broad, rules-based index guy-a bit of a stats nerd, just tracking a bunch of high-yield stocks with the consistency of your annoying uncle who always shows up for holidays, uninvited but somehow indispensable.

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

Look, fee-wise, VYM’s the clear winner-like finding a $5 bill on the street when you thought you’d find nothing but lint. It’s cheap, it’s cheerful. FDVV, on the other hand, offers a higher dividend punch, which makes sense if you’re the type who thinks “more income” justifies playing with some sectors that could turn on you faster than a tourist in Times Square. The size difference is startling-VYM’s got more zeros on its AUM cheque, but hey, sometimes bigger’s just more cumbersome, like those oversized trench coats that always seem to hide 12 full-sized ham sandwiches.

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

And now we get to the emotional part-risk. FDVV’s max drawdown? It’s like that awkward moment when you realize you shouldn’t have said what you just said, except it’s financial-20.17%, give or take, enough to make you question your life choices. VYM? It’s not perfect, but at least it’s just slightly less of a disaster, with a drawdown of around 15.87%. The growth? Well, they’re close, calling each other’s bluff, but if you’re not comfortable with a rollercoaster-tech-heavy sector risks, potential for bigger swings-you might want to think twice about letting FDVV lead your portfolio into the wild west of high yield.

What’s inside?

VYM? It’s like your well-meaning cousin who has a broad interest-holding 566 stocks. Its top sectors include financials (21%), tech (18%), and healthcare (13%). Names like Broadcom, JPMorgan Chase, and Exxon Mobil are the usual suspects-reliable if a little sleepy. It’s passive, it aims for the long haul, full-replication style, like that friend who always shows up on time and never forgets your birthday.

FDVV? It’s a different breed-smaller, more intense, with only 107 holdings. It slants heavily towards tech (26%) and consumer defensive (12%), probably because those sectors pay more-like that guy at the party who always insists he’s “not interested,” but clearly is. Top holdings include Nvidia, Microsoft, and Apple. It’s built to give you higher yields through sector tilts, but beware-more concentrated bets come with more drama, more volatility, more chances you’ll wake up in the middle of the night sweating about your investment’s health.

In short, the choice here is less about which fund wins and more about which social grudge you’re willing to carry into your portfolio. More tech risk? Or safer, steadier waters? That’s the question, and I don’t think there’s a universal answer-just like in life, really.

Glossary

ETF: Think of it as a mutual fund that’s got a badge, a license, and probably a better haircut. It’s a basket of securities you buy on an exchange, without awkward in-person meetings.
Expense ratio: The annual fee for the privilege of owning a fund-like a cover charge at a club, but instead of dancing, you get stocks.
Dividend yield: The annual dividends divided by the current price-kind of like the tip you leave after a nice dinner, expressed as a percentage.
Sector-constrained approach: Limiting how much a fund can go all-in on certain sectors-like not letting your kid play only in the sandbox.
Beta: That’s the measure of how wild a fund is compared to the overall market-think of it as your investment’s “I might throw up” factor.
AUM: Assets Under Management-just the big, fancy way of saying “how much money we’re playing with.”
Max drawdown: The biggest one-day drop from peak to trough-kind of like that painful moment when your team loses in the last minute.
Full-replication approach: Buying all the stocks in the index in the same proportion-like following a recipe exactly, even if it’s not so exciting.

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2025-12-22 02:54