Generated October 3, 2026.
Overview
FDVV and VYM are both dividend-focused equity ETFs tracking high-yield U.S. stock indexes, but they differ in scale, cost, and underlying index construction. FDVV tracks the Fidelity High Dividend Index and focuses on large- and mid-cap stocks expected to sustain and grow payouts. VYM tracks the FTSE High Dividend Yield Index, centering on large-cap dividend payers with value characteristics. The two funds deliver similar distributions on different asset bases—VYM is substantially larger and cheaper to own.
How they differ
The first major difference is index methodology. FDVV uses Fidelity's proprietary index and emphasizes dividend sustainability and growth, potentially admitting mid-cap stocks. VYM uses FTSE's index with explicit value-stock selection, staying within large-cap territory. This likely produces different sector weightings and company mix between the funds.
Second, fees are materially different. VYM's expense ratio is 0.04%, versus 0.15% for FDVV—a gap of 0.11% that compounds over decades. VYM's asset base of $80.2B also dwarfs FDVV's $10.3B, giving VYM economies of scale that have kept its costs lower.
Third, yield and risk profile diverge slightly. FDVV pays 2.38% while VYM yields 2.27%, a 11-basis-point gap. Beta tells a similar story: FDVV's beta of 0.76 sits above VYM's 0.66, suggesting FDVV's stock mix (potentially including mid-caps and growth-oriented dividend stocks) moves a touch more with broad equity markets.
Who each is best for
FDVV: Fits investors seeking exposure to a broader dividend opportunity set, including mid-cap names alongside large-cap payers, who are comfortable with slightly higher relative volatility and willing to pay a modestly higher fee for active index methodology focused on dividend growth.
VYM: Fits investors who prioritize cost efficiency and value-stock characteristics over index innovation, have a long time horizon to absorb the lower current yield in exchange for a simpler, larger, and cheaper vehicle, and view the lower fee as worth the trade for stability and historical performance.
Key risks to know
- Index concentration risk: Both funds track indexes, not manage them. If the underlying FTSE or Fidelity index becomes concentrated in a few high-yielding sectors or mega-cap names, the fund's diversification benefit erodes even as holdings diversify on paper.
- Dividend sustainability and cut risk: Both funds hold equities selected partly on dividend history, but high past yields do not guarantee future payments. Economic downturns or corporate stress can trigger unexpected cuts, which would lower yields and potentially depress share prices as the income rationale weakens.
- Beta and equity market timing: FDVV's 0.76 and VYM's 0.66 both imply meaningful sensitivity to broad U.S. equity market moves. Investors relying on these for income should expect NAV swings during corrections; distributions may feel less steady if portfolio values decline sharply.
Bottom line
If you're drawn to lower costs and a battle-tested, large-cap value focus, VYM's 0.04% fee and $80.2B asset base offer simplicity and scale. If you want exposure to mid-cap dividend growers and trust Fidelity's screening methodology enough to justify the higher fee, FDVV delivers a different index approach at a modest cost premium. Both carry the standard equity risk of dividend cuts and market downturns; past distribution rates do not predict future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
