A Core Smart Beta ETF For Dividend Investors

Investors may also consider consistent dividend growers as a way to gain exposure to this group of quality companies as dividend growers and high quality stocks share a number of similar characteristics.

Bolstering the case for FDVV is that the ETF focuses on new sources of dividend growth. When many investors think of ETFs dedicated to dividend growth, they think of funds focusing on slower-moving sectors such as consumer staples. However, FDVV allocates over 27% of its weight to technology stocks, one of the largest weights to that sector among all dividend ETFs.

Additionally, FDVV allocates about 40.6% of its combined weight to the financial services and consumer discretionary sectors, groups that have been major contributors to S&P 500 dividend growth in recent years.

Conversely, FDVV features light allocations to rate-sensitive staples and utilities stocks. Plus, the Fidelity ETF only has scant energy exposure, which is a plus because that sector has been home to the bulk of the negative dividend action in the S&P 500 for two years.

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