FDVV vs SCHD: The New Dividend ETF Contender
Fidelity's FDVV has become the dividend ETF that finally gives SCHD real competition — different index construction, more mega-cap exposure, and a meaningfully different risk profile.
FDVV = higher mega-cap tech exposure (Apple, Microsoft, Nvidia in top 10), better total return in tech-led markets, slightly lower yield. SCHD = quality-screened dividend growers, no mega-cap tech, higher yield, better defensive profile. FDVV has outperformed SCHD over 2022-2024 thanks to that tech tilt.
Quick stats
| Metric | FDVV | SCHD |
|---|---|---|
| Price | $59.18 | $31.05 |
| TTM yield | 2.80% | 3.40% |
| Real yield (NAV-adj.) | 3.63% | 4.22% |
| NAV change (period) | 29.6% | 24.1% |
| Annualized volatility | 1091.5% | 1181.1% |
| Distribution frequency | quarterly | quarterly |
| Expense ratio | 0.15% | 0.06% |
| Inception | 2016-09-12 | 2011-10-20 |
| AUM | ~$5B | ~$70B |
| 1Y dividend CAGR | 11.3% | -32.1% |
| 3Y dividend CAGR | 8.4% | 7.0% |
| 5Y dividend CAGR | 9.8% | 9.2% |
| 5Y price CAGR | 10.0% | 4.5% |
Strategy & holdings
FDVV tracks the Fidelity High Dividend Index, which combines three factors: dividend yield, payout ratio, and dividend growth. Critically, it does not exclude mega-cap tech — Apple, Microsoft, and Nvidia regularly appear in the top 10 because they pay growing dividends even if their yields are modest. SCHD's quality screen and 10-year dividend history requirement has historically excluded most of these names.
Fidelity High Dividend Index — ~100 US stocks selected on dividend yield, payout sustainability, and dividend growth. Critically includes megacap tech (Apple, Microsoft, Nvidia) when they qualify. Broader sector exposure than SCHD.
Dow Jones U.S. Dividend 100 Index — 10-year dividend history requirement, quality screens on cash flow, ROE, yield, and dividend growth. Deliberately excludes most mega-cap tech. Heavy on financials, staples, healthcare.
The FDVV vs SCHD debate is really an argument about whether dividend-paying mega-cap tech belongs in a 'dividend ETF.' FDVV says yes — Apple pays a dividend, grows it, has sustainable cash flow, so it qualifies. SCHD says no — Apple's yield is too low and it hasn't been paying long enough to clear the 10-year screen. The practical consequence: FDVV's top holdings overlap significantly with VOO, so FDVV behaves like a lower-yield, higher-total-return dividend fund. SCHD is a much more distinct basket with less correlation to the broad market.
Yield & distributions
SCHD yields roughly 50-80 basis points more than FDVV. FDVV's lower yield reflects its mega-cap tech holdings, which have dividend yields under 1%. Both have solid dividend growth, but SCHD's is typically more consistent because the underlying businesses (staples, healthcare) have more stable payout histories. FDVV's dividend growth can be lumpier because tech dividends vary by company.
Total return & NAV
FDVV has outperformed SCHD meaningfully since 2022. The reason is simple: FDVV benefited from the mega-cap tech rally while SCHD sat it out. Over 1Y and 3Y rolling windows, FDVV has typically beaten SCHD by 3-6 percentage points annualized. Over 5Y+ the gap narrows because the comparison starts to include SCHD's good years. Whether FDVV's outperformance persists depends on whether mega-cap tech dominance continues.
Risk & volatility
FDVV has higher correlation to the S&P 500 and higher beta than SCHD because of the tech overlap. In a tech correction, FDVV draws down more. SCHD has historically been more defensive — its 2022 drawdown was notably smaller than both VOO and FDVV. If you're using a dividend ETF partly for downside protection, SCHD is still the better tool. If you're using it for diversified US equity with some yield kicker, FDVV makes sense.
Tax treatment
Both funds pay almost entirely qualified dividends, taxed at long-term capital gains rates. Both are excellent for taxable accounts. The tax treatment is not a meaningful differentiator between these two.