Vanguard vs. Fidelity High-Dividend ETFs: Which Fits Your Income Strategy?

Vanguard High Dividend Yield ETF (NYSEMKT:VYM) offers a low-cost, broadly diversified approach, while Fidelity High Dividend ETF (NYSEMKT:FDVV) provides a higher current yield through a concentrated, tech-leaning portfolio.

Both funds target income-seeking investors but take different paths. Vanguard High Dividend Yield ETF tracks a broad index of high-dividend payers, emphasizing stability and diversification. Fidelity High Dividend ETF uses a sector-overweighting strategy to boost income, resulting in a more aggressive posture than many typical dividend-focused funds.

Snapshot (cost & size)

Metric	FDVV	VYM
Issuer	Fidelity	Vanguard
Share price (as of 9/28/26)	$61.32	$156.75
Expense ratio	0.15%	0.04%
1-yr return (as of 2026-09-28)	13.5%	14.1%
Dividend yield	2.8%	2.3%
Beta	0.86	0.73
AUM	$10.4 billion	$100.8 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

Vanguard High Dividend Yield ETF is the more affordable option with a 0.04% expense ratio, while Fidelity High Dividend ETF charges 0.15%. However, Fidelity High Dividend ETF provides a higher payout, offering a yield 0.5 percentage points above its Vanguard counterpart.

Performance & risk comparison

Metric	FDVV	VYM
Max drawdown (5 yr)	(20.2%)	(15.9%)
Growth of $1,000 over 5 years (total return)	$1,928	$1,734

What's inside

The Vanguard High Dividend Yield ETF provides exposure to about 600 holdings, primarily in financial services (21%), technology (17%), and industrials (17%). Its largest positions include Broadcom at 6.9%, JPMorgan Chase at 3.8%, and ExxonMobil at 2.7%. The fund was launched in 2006. Vanguard High Dividend Yield ETF has paid $3.68 per share over the trailing 12 months, which on its recent ~$156.75 share price works out to a 2.3% yield.

In contrast, Fidelity High Dividend ETF manages a tighter portfolio of around 100 stocks with a significant 29% tilt toward technology, followed by financial services (20.5%) and consumer cyclical (12%). Its largest holdings include Nvidia at 7.32%, Apple at 6.4%, and Microsoft at 5.4%. It was launched in 2016. Fidelity High Dividend ETF has paid $1.71 per share over the trailing 12 months, which on its recent ~$61.32 share price works out to a 2.8% yield.

For more guidance on ETF investing, check out the full guide at this link.

Which looks like the better buy

Investors looking to juice their dividend returns may be drawn to FDVV's more concentrated, tech-heavy portfolio. Its 2.8% dividend yield beats out VYM's 2.3%, and its long-term capital appreciation also comes out ahead. But it's more expensive to own, which can eat into total returns over time, and its concentration makes it more susceptible to volatility.

VYM doesn't have quite the level of income generation that FDVV does, but it's much more diversified, less expensive, and less volatile. And its 2.3% dividend yield is still more than double the S&P 500's 1.05%.

For most long-term investors, I think VYM is the better option. Its lower fees and volatility will likely compensate for its slightly lower dividend yield over a long enough holding period, while still generating a relatively robust income stream. FDVV will certainly deliver some relatively safe dividend income for your portfolio, but if you already hold some of its top names either individually or via another broad market index, adding FDVV could lead to significant concentration risk, setting you up for future discomfort if industry headwinds cause these big names to stumble.

JPMorgan Chase is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Apple, 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.