Home / Business and Economy / Fidelity ETF Outperforms IDV: Cheaper, Better Returns
Fidelity ETF Outperforms IDV: Cheaper, Better Returns
19 Sep
Summary
- Fidelity's FIDI ETF offers higher total return with lower fees.
- IDV ETF prioritizes yield over total return for income investors.
- Lower fees from FIDI save investors hundreds annually.
The Fidelity International High Dividend ETF (FIDI) is emerging as a strong competitor to the iShares International Select Dividend ETF (IDV). Over the trailing year, FIDI delivered a 27% return while charging only 0.18% in fees. In contrast, IDV charges 0.50%, a difference that saves investors approximately $320 annually per $100,000 invested.
While IDV does offer a higher dividend yield exceeding 5% compared to FIDI's 3.9%, it is generally recommended for investors who prioritize current income over total return. For those holding IDV in taxable accounts, it is advised to redirect new contributions to FIDI to benefit from lower fees and potential tax advantages, rather than selling existing shares.
The article also touches upon the outdated nature of the traditional 4% rule for retirement planning, suggesting an income-first strategy. This approach emphasizes building an income floor from dividends, interest, and Social Security to cover essential expenses, thereby avoiding the need to sell assets during market downturns.
