Generated October 3, 2026.
Overview
DGRO and FDVV are both U.S. equity ETFs designed around dividend growth, but they emphasize different sides of the dividend story. DGRO tracks the Morningstar U.S. Dividend Growth Index and focuses on companies with a consistent history of growing dividends while keeping payout ratios disciplined (under 75%). FDVV tracks the Fidelity High Dividend Index and prioritizes companies paying high current yields while also expected to sustain and grow those payouts. The key distinction: DGRO screens out the highest-yield stocks and favors dividend growth momentum; FDVV welcomes higher-yielding names from the start.
How they differ
DGRO's screening criteria explicitly exclude stocks in the top decile of dividend yield and enforce a payout ratio cap of 75%, which tilts the portfolio toward companies in the growth phase of their dividend journey rather than the mature, high-yield phase. FDVV starts with high-dividend-paying large- and mid-cap stocks but applies its own expectation that dividends will be sustained and grown, without publishing the same hard yield or payout-ratio caps.
FDVV offers a higher current distribution rate (2.38% vs. 2.03%), reflecting its explicit focus on current income from high-yielding names. DGRO's lower yield is the tradeoff for its growth-screen bias. Both pay quarterly distributions and have tight expense ratios, though DGRO's 0.08% undercuts FDVV's 0.15% by 0.07%.
DGRO is substantially larger, with $42.5B in assets versus $10.3B for FDVV. Both carry a beta below 1.0—DGRO at 0.66 and FDVV at 0.76—suggesting a defensive posture relative to the broad market, though FDVV's beta is slightly higher.
Who each is best for
DGRO: Fits investors who want a core, low-cost equity holding tilted toward companies with proven momentum in dividend growth and room to raise payouts further—those who see yield as a byproduct of quality and rising earnings, not a primary income target.
FDVV: Fits investors prioritizing current income from a portfolio of large- and mid-cap stocks expected to pay and grow dividends, accepting higher current yield in exchange for a less-growth-tilted screen and slightly higher fees.
Key risks to know
- Yield sustainability in downturns. Both funds' compositions could face pressure during recessions or credit stress; companies that have grown dividends steadily may cut sooner than their historical behavior suggests, or face earnings pressure that halts growth momentum.
- Growth-screen drag in high-yield environments. DGRO's explicit exclusion of top-decile yielders means it may underperform when the market rewards higher-yielding equities, particularly in rising-rate regimes where safe dividend stocks outperform growth.
- Market-cap and sector concentration. Both funds hold large- and mid-cap U.S. equities and may carry overlapping positions; verify portfolio overlap before pairing them in a single allocation.
- Beta divergence in equity selloffs. While both betas are below 1.0, FDVV's modestly higher beta (0.76 vs. 0.66) means it may experience slightly steeper drawdowns in a broad equity decline, offsetting its defensive label.
Bottom line
If you want a core dividend-equity holding with a proven growth screen and the lowest cost, DGRO stands out; if you prioritize current yield and are comfortable with a less-growth-constrained screen, FDVV's higher distribution rate may appeal. Both are structurally sound, but they reflect different philosophies on the role dividend yield should play in the portfolio. Past performance does not predict future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
