The FDVV ETF Delivers Higher 5-Year Growth Than the HDV ETF

FDVV’s edge is not really ‘high dividend’ in the traditional sense; it is a disguised quality-growth dividend basket that monetizes balance-sheet strength and payout acceleration in mega-cap tech. That creates a different factor stack than HDV: more duration sensitivity, more multiple exposure, and a bigger dependency on a narrow set of winners continuing to compound cash flow faster than the market expects. In a falling-rate or soft-landing regime, that mix should keep outperforming; in a rates-back-up shock, its longer-duration cash flows are the first to get hit.

HDV is the cleaner defensive income sleeve, but its energy/consumer-staples tilt makes it vulnerable to the classic value trap dynamic: high current yield, lower reinvestment runway, and more cyclical dividend sustainability than the label implies. If oil rolls over or defensive earnings reset lower, the fund’s yield cushion can look attractive right up until total return stagnates. The deeper drawdown history matters because the portfolio has less internal growth to self-heal after a factor rotation.

The most interesting second-order effect is that FDVV’s top weights are the same names investors already own through broad market and mega-cap growth exposure, so the incremental alpha may be lower than the headline return suggests. In other words, FDVV can work as a yield-enhanced extension of existing tech exposure, but it is not a true diversifier. The consensus is probably underweighting how much of FDVV’s excess return is simply a tech beta trade wrapped in dividend branding.

The setup favors relative-value positioning rather than outright beta chasing: if rates fall or stay contained, FDVV should continue to outperform HDV; if rates rise or growth leadership broadens out, HDV’s lower duration and cheaper fee structure should narrow the gap. The key catalyst window is the next 3-6 months, when guidance from mega-cap tech and rate expectations will matter more than static dividend screens. A reversal would likely come from a sharp de-rating in the large-cap growth complex or a commodity-driven spike that re-energizes HDV’s energy sleeve.