FDVV's Tech-Heavy Portfolio — An Odd Fit for Dividend Seekers
By John Nada·May 16, 2026·3 min read
FDVV holds 26.7% in tech, surprising for a dividend ETF. Contrast with HDV’s classic income approach.
26.7% of the Fidelity High Dividend ETF's portfolio is in tech stocks. That’s a hefty slice for a fund marketing itself as a haven for dividend income, according to Yahoo Finance. The tech giants—Nvidia, Apple, Microsoft, and Broadcom—dominate this index, soaking up over 20% of the fund's holdings. But here’s the kicker: their dividend yields are scant, with Nvidia barely registering at 0.02%.
Why load up on tech if dividends are the goal? Tech stocks are notoriously volatile, often chasing growth over income distribution. This could leave dividend investors scratching their heads. Traditional dividend-hunting sectors like consumer staples or utilities don’t get the same spotlight here. Instead, a big tech bet in a market looking for stability could be a gamble.
The Fidelity High Dividend ETF holds 110 stocks and has a trailing-12-month dividend yield of 2.79%. Despite its tech-heavy approach, this fund has delivered impressive average annual returns of 18.8% over the past three years and 13.3% since its inception in 2016. However, much of this performance is attributed to the appreciation of tech stocks, raising concerns about its sustainability in a potential downturn.
The portfolio's top sector is Information Technology, making up 26.7% of the fund. Nvidia, Apple, Microsoft, and Broadcom, together forming more than 20% of the fund's holdings, have seen substantial share price growth. Yet, their low dividend yields present a conundrum for those prioritizing income over growth.
What’s the alternative for a more traditional dividend approach? The iShares Core High Dividend ETF offers a classic income investment strategy. Unlike its Fidelity counterpart, this fund focuses on sectors like consumer staples, energy, and healthcare, which are known for their robust and reliable dividends. Information technology constitutes just 8.2% of its portfolio.
Historically, the iShares Core High Dividend ETF has provided a steady 10.7% annualized return over the past 15 years. This fund's performance underscores the reliability of its sector choices, appealing to investors seeking consistency and less exposure to the volatility of tech stocks.
Comparing the two, the Fidelity fund has outperformed the iShares fund in recent years, benefiting from the rising tide of tech stocks. However, for investors who prioritize dividend income over capital appreciation, the iShares ETF may be more aligned with their goals.
The debate between the two funds highlights a broader tension in investment strategies: stability versus growth, certainty versus speculation. While the Fidelity High Dividend ETF offers a high-risk, high-reward proposition with its tech-heavy focus, the iShares Core High Dividend ETF represents a potentially safer choice with its traditional dividend-centric approach.
Ultimately, choosing between these ETFs depends on an investor's risk tolerance and income objectives. Those willing to embrace the volatility of tech stocks for potentially greater rewards might lean towards Fidelity, while those seeking stability and consistent income might find the iShares fund more appealing.