Guarding Against Rising Rates While Sticking With Dividend ETFs

Moreover, once the six new ETFs hit the market September 15, investors who are utilizing the Fidelity brokerage platform will have 91 commission-free ETFs at their disposal – the commission-free ETFs include Fidelity’s full line, along with 70 iShares offerings.

“Knowing that FDRR is designed to thrive if borrowing costs rise, it is not surprising that rate-sensitive utilities and telecom stocks combine for less than 6% of the new ETF’s weight and are two of the three smallest sectors in the new fund,” according to InvestorPlace.

SEE MORE: Fidelity Joins Smart Beta ETF Marathon

Conversely, FDRR allocates close to half of its weight to sectors that are consider cyclical, including consumer discretionary and technology stocks. That does not mean investors sacrifice dividend growth potential with FDRR.

The opposite is true as many of the new ETF’s largest holdings have long histories of steadily boosting payouts, an important factor because dividend growth is often a buffer against rising inflation.

For more information on new fund products, visit our new ETFs category.

Fidelity Dividend ETF for Rising Rates (NYSEArca: FDRR)