For years, the dividend ETF leaderboard seemed locked in place.

The Vanguard Dividend Appreciation ETF (VIG), the Vanguard High Dividend Yield ETF (VYM), and the Schwab U.S. Dividend Equity ETF (SCHD) have dominated income portfolios with a combination of reliable income, strong fundamentals, and low fees.

But in 2025, the script has completely flipped. As the interest rate environment shifts and investors have shown strong demand for high-yield investments, a Fidelity ETF that most of the market has overlooked has quietly led the performance charts.

It’s posting much stronger returns than SCHD. It’s had a better growth profile than both VIG and VYM. It’s been hitting all of the strongest performing areas of the market.

It’s been an unexpected winner, and it’s forcing dividend investors to rethink just where they should be investing their money in 2025 and beyond.

That under-the-radar outperformer is the Fidelity High Dividend ETF (FDVV). And it’s quickly becoming one of the best dividend ETFs of 2025.

How the Fidelity High Dividend ETF beats the giants

The Fidelity High Dividend ETF has existed since 2016. It tracks the Fidelity High Dividend Index, which screens large-cap stocks for high dividend yields, low payout ratios, and high dividend growth rates.

The key to the Fidelity dividend ETF’s success has been its dividend yield strategy and selection methodology. It often produces a dividend yield 3x that of the S&P 500 and can overweight some of the market’s best-performing stocks while maintaining sector flexibility.

Related: Forget VOO, SPY, VTI: Best stock investing pick is this Fidelity fund

This means that while dividend ETFs such as VIG, VYM, and SCHD are focused on old, boring dividend stocks, FDVV has been able to invest in growth stocks such as Nvidia, Microsoft, and Apple in a way that most dividend ETFs haven’t.

And that’s led to big outperformance for FDVV vs. VIG, VYM, and SCHD. 

The FDVV edge: growth stocks in a dividend portfolio

FDVV’s advantage is that the fund targets dividend income, growth, and high yield.

The FDVV strategy focuses on high yield more than anything, but its consideration of payout ratio and dividend growth gives it a quality tilt as well. In the current market, that makes it a growth dividend ETF with an income tilt.

While dividend stocks are initially scored according to these criteria, they’re eventually weighted by market cap within their sectors. That has allowed tech and the Magnificent 7 stocks to rise to the surface to become FDVV’s top holdings.

This has been the ideal combination of criteria this year, making FDVV one of the best dividend ETFs for 2025.

FDVV vs. VIG, VYM, SCHD and DGRO: 2025 performance

FDVV hasn’t been just a good performer. It’s been one of the best dividend ETF performers of 2025 and beyond.

FDVV is outperforming DGRO by just over 1% in 2025, as well a VIG and VYM by 2%. It’s also crushing SCHD this year by more than 12%.

Looking back at five-year performance, the gap is even larger. FDVV performance has outpaced its Vanguard, Schwab, and iShares peers by 4% to 8% annually.

Why is FDVV outperforming? The upcoming Fed rate-cutting cycle has boosted all stocks in 2025, but especially high-yield stocks. The resilient U.S. economy and steady earnings growth have also contributed, and the tech overweight has been key.

FDVV sector breakdown and top holdings

The Fidelity High Dividend ETF’s performance in 2025 has largely been driven by its tech sector exposure, but it’s not the only one that’s helped.

A strategic overweight to utility stocks, which has actually been the best-performing S&P 500 sector year to date, has also boosted returns.

Here’s the FDVV sector breakdown:

The Magnificent 7 stock holdings have unquestionably been the biggest driver of FDVV performance in 2025.

FDVV top holdings including Nvidia, Microsoft, and Broadcom have delivered huge returns for investors, and these are stocks that don’t often appear in many dividend ETFs.

FDVV’s strategy of identifying a universe of dividend stocks first and then using a modified market cap weighting methodology to build the portfolio has certainly worked in the fund’s favor in 2025.

Can FDVV keep beating Vanguard and Schwab?

The closest comparison to FDVV is probably VIG. It’s a fund that also uses a market cap weighting methodology to build its portfolio and has a similar tech overweight.

That type of strategy certainly helps when the mega-cap companies are outperforming, as has been the case throughout 2025 and the past few years.

More ETFs

• Forget VOO, SPY, VTI: Best stock investing pick is this Fidelity fund
• Best Vanguard ETFs for the rest of 2025
• Why the Schwab Dividend ETF (SCHD) Is losing its edge to Vanguard

FDVV leadership probably only begins to yield if the current market broadens out or there’s a pivot to defense in the markets. The combination of healthy corporate earnings, resilient GDP growth, and an imminent Fed rate cutting cycle has kept investors in a risk-on mood.

Those factors are likely sustainable for a while longer. And that means FDVV has a strong case for continuing to outperform VIG and VYM from Vanguard and SCHD from Schwab.

Key takeaways:

• FDVV has an overweight to tech and the Magnificent 7 stocks.
• Its methodology works best when mega-caps are in favor.
• FDVV is most similar to VIG among the Vanguard and Schwab dividend ETFs.
• FDVV is well-positioned to continue outperforming.

FDVV: Bottom line for dividend investors

Should you buy FDVV?

The Fidelity High Dividend ETF isn’t a household name, but it’s proving that a smart dividend approach built in the right markets can outperform handily. Its blend of high yield and capital growth upside make it more unique in the dividend ETF universe, but could be ideal for investors seeking both factors.

If you’re looking to add a high yield dividend component to your portfolio, FDVV is a great choice to consider.

Related: Best Vanguard ETFs for the rest of 2025