Vanguard vs. Fidelity: Is VIG or FDVV the Better Dividend ETF to Buy?
Key Points
FDVV offers a higher dividend yield and a slightly better one-year return than VIG.
VIG charges a lower expense ratio and holds 338 stocks, with much greater assets under management.
Both ETFs lean heavily into technology and financials, but FDVV has a larger tilt toward consumer defensive stocks.
Fidelity High Dividend ETF (NYSEMKT:FDVV) stands out for its higher yield and better recent performance, while Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) appeals with lower costs, a broader portfolio, and far greater assets under management.
Both funds focus on dividend-oriented U.S. stocks, but their approaches and portfolios differ. This comparison examines cost, performance, risk, and portfolio composition to help investors decide whether FDVV’s higher yield and sector tilts outweigh VIG’s lower fees and broader diversification.
Snapshot (cost & size)
| Metric | FDVV | VIG |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Expense ratio | 0.15% | 0.05% |
| 1-year return (as of 2026-1-2) | 17.7% | 15.1% |
| Dividend yield | 3.02% | 1.59% |
| Beta | 0.82 | 0.79 |
| AUM | $7.7 billion | $120.4 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The one-year return represents total return over the trailing 12 months.
FDVV charges a 0.15% expense ratio, but VIG is even more affordable at 0.05%. FDVV may appeal to income-seekers with its 3.02% yield, which is substantially higher than VIG’s 1.59% payout.
Performance & risk comparison
| Metric | FDVV | VIG |
|---|---|---|
| Max drawdown (5 y) | (20.2%) | (20.4%) |
| Growth of $1,000 over 5 years | $2,098 | $1,713 |
What's inside
VIG tracks a diversified basket of 338 large-cap U.S. companies with a history of raising dividends, spanning technology (30%), financial services (21%), and healthcare (15%). Its largest holdings include Broadcom Inc. (NASDAQ:AVGO), Microsoft Corp.(NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL). At nearly 20 years old, VIG’s long track record and broad approach may appeal to investors seeking stability and wide market coverage.
FDVV, by contrast, holds 119 stocks and tilts toward technology (26%), financial services (19%), and consumer defensive (12%) sectors. Its top positions include Nvidia Corp. (NASDAQ:NVDA), Microsoft, and Apple. While both ETFs emphasize technology, FDVV’s added exposure to consumer defensives may shape risk and income characteristics differently.
What this means for investors
Since 2016, these two dividend ETFs have delivered nearly identical total returns for investors, with FDVV gaining 13.2% annually and VIG rising 13.1% over the same period. Over the last year, three years, and five years, though, FDVV has delivered superior returns -- more than doubling since 2021. However, much of this outperformance for FDVV is due to its largest position, Nvidia, which has been a 14-bagger over the last five years and now equals 6.2% of the ETF's holdings.
While these returns are great for investors, it's a bit unfair to call Nvidia a "high dividend" stock with a yield of just 0.02%. Due to this factor, I'd say the performance difference between the two ETFs is much closer than the numbers suggest. Thanks to its lower expense ratio and actually being a "true" dividend ETF, I'd lean toward VIG as I already own Nvidia.
That said, VIG's dividend yield is barely half that of FDVV's 3.02%. Making matters worse, despite being a dividend growth ETF, VIG has only grown its payouts by 9% annually over the last five years, while FDVV has delivered 10% growth. Ultimately, it all comes down to an investor's preferences with this one. If you don't own any Nvidia, FDVV may be a great way to get some growth alongside some top-tier dividend stocks. However, if you want a "true" dividend ETF, I could only recommend VIG.
Glossary
ETF: Exchange-traded fund, a basket of securities that trades on an exchange like a stock.
Dividend yield: Annual dividends per share divided by the share price, showing income produced by an investment.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund's average assets.
Assets under management (AUM): Total market value of all assets that a fund or manager oversees.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Beta: Measure of an investment's volatility compared with the overall market, typically the S&P 500.
Max drawdown: Largest peak-to-trough decline in an investment's value over a specified period.
Sector tilt: When a portfolio holds more or less of certain sectors than the broader market.
Consumer defensive: Sector of companies selling essential goods that people buy regardless of economic conditions.
Large-cap: Companies with relatively large market values, typically tens of billions of dollars or more.
Dividend-oriented: Investment approach focusing on stocks that pay regular cash dividends to shareholders.
Diversification: Spreading investments across many securities or sectors to reduce the impact of any single holding.
For more guidance on ETF investing, check out the full guide at this link.
Josh Kohn-Lindquist has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Dividend Appreciation 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.