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FDVV: A High Dividend ETF For A Low Interest Rate Environment

Published Sun, 07 Apr 2019 20:55:04 -0400 on Seeking Alpha

These are tough times for those looking for investment income. The interest rates have fallen recently and will likely remain low in the near future. Against this backdrop, high-quality dividend stocks can serve investors well. I believe investors should consider the little-known Fidelity High Dividend ETF (FDVV), which can give investors exposure to a number of great dividend stocks and an above-average dividend yield.

Image courtesy of Pixabay
Last month, the Federal Reserve kept interest rates flat at 2.25-2.5% and signaled that it won’t hike rates in 2019. Chairman Jerome Powell reiterated the central bank’s commitment of being “patient” at a time when the economy, though stable, is facing headwinds. The Fed’s move was widely expected. A number of major central banks around the world, such as the European Central Bank, have also turned dovish amid mounting concerns related to a global economic slowdown and uncertainties stemming from Brexit and the US-China trade war. I believe the fact that President Trump might consider capitalizing on challenging the Fed on any interest rate hike in the 2020 presidential elections also reduces the chances of a rate hike.

Image: Author. Source: U.S. Department of the Treasury. As on April 02, 2019.
The long-term rates have fallen considerably after Fed’s latest decision, with 30-year Treasury bond yields dropping from more than 3% a few weeks ago to 2.88% at the time of this writing. Moreover, the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ISHARES DOW JONES SELECT DIVIDEND INDEX FUND 103.22   0.0 0.00 3.37 3.31
VANGUARD HIGH DIVIDEND YIELD ETF 89.75   0.0 0.00 0.00 2.79
SPDR S&P DIVIDEND ETF 103.80   0.0 0.00 2.42 2.36

ISHARES DOW JONES SELECT DIVIDEND INDEX FUND - DVY
ISHARES DOW JONES SELECT DIVIDEND INDEX FUND - DVY  


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