Investors wary of high tech stock valuations and potential AI bubbles may want to explore dividend stocks as a safer alternative. Two notable ETFs in this space are the Fidelity High Dividend ETF (FDVV) and the ProShares S&P 500 Dividend Aristocrats® ETF (NOBL). While FDVV offers a higher average annual return of 13.3% since its 2016 launch, it is heavily weighted in tech stocks, which could counteract the goal of diversifying away from that sector. In contrast, NOBL focuses on companies with a 25-year history of increasing dividends, providing stability but delivering lower returns of 10.5% since its inception in 2013.
The choice between these ETFs hinges on investor priorities: FDVV’s tech exposure and higher yield versus NOBL’s historical reliability and lower volatility. With FDVV’s lower expense ratio of 0.15% compared to NOBL’s 0.35%, cost-conscious investors may lean toward FDVV for better returns, though both funds have lagged behind the S&P 500 recently.
Ultimately, while dividend ETFs can offer passive income, investors should weigh their specific goals and market conditions, considering that broader index funds might still present a more compelling long-term strategy.
Source: fool.com