Using dividend factor ETFs

A dividend-focused investment strategy generally targets companies with higher dividends that are expected to sustain and grow their dividends. Over time, securities that pay higher dividend yields tend to provide superior returns. Investors can use dividend distributions as income or reinvest them for portfolio growth. Dividend yield is a characteristic of stocks often targeted by factor-based strategies.

What is a dividend yield factor?

The dividend yield factor seeks exposure to companies that have demonstrated stable and increasing dividends. It provides a higher relative dividend yield and income to investors.

  • Typically defined as dividend yield, dividend growth and dividend sustainability
  • Common ways to measure dividend are through divided yields, payout ratio and dividend growth

Why does it matter?

Income needs may be better met through investment in higher-yielding equities — given historically low bond yields and an aging demographic, interest in dividend-yielding stocks may persist

Dividend-paying stocks provide investors with higher relative dividend yield and income

Companies that pay dividends tend to outperform during economic contractions and early recoveries, because they provide defensive income

Fidelity Canada Dividend Index ETFs

Fidelity Canadian High Dividend Index ETF

Ticker symbol
FCCD

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Fidelity U.S. High Dividend Index ETF

Ticker symbol
FCUD

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Fidelity U.S. High Dividend Currency Neutral Index ETF

Ticker symbol
FCUH

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Fidelity International High Dividend Index ETF

Ticker symbol
FCID

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Fidelity U.S. Rising Rates Index ETF

Ticker symbol
FCRR

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Fidelity U.S. Rising Rates Currency Neutral Index ETF

Ticker symbol
FCRH

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Also available as mutual funds which will invest in the underlying ETFs:

Fidelity Canadian High Dividend Index ETF Fund

Fidelity U.S. Dividend for Rising Rates Index ETF Fund

Fidelity U.S. Dividend for Rising Rates Currency Neutral Index ETF Fund

Fidelity U.S. High Dividend Index ETF Fund

Fidelity U.S. High Dividend Currency Neutral Index ETF Fund

Fidelity International High Dividend Index ETF Fund

Fidelity Tactical Global Dividend ETF Fund

* This fund is a single-ticket global dividend solution with a tactical asset allocation overlay designed to generate income in various market environments.

Fidelity for dividend yield factor-based investment strategy

At Fidelity, our dividend factor funds seek to track the performance of tailor-made indexes that are actively designed. The Fidelity Canada High Dividend Factor Index is designed to reflect the performance of stocks from dividend-paying companies that are expected to continue to pay and grow their dividends. Typically, securities that pay higher dividend yields tend to provide superior returns over time. The Fidelity Canada Dividend for Rising Rates Factor Index is designed to find companies that are not only expected to pay and grow their dividends but also have a positive correlation of returns to increasing ten-year U.S. Treasury yields. It aims to provide protection in an environment of rising interest rates.

Single-factor exposure to high-quality dividend-paying companies

An outcome-oriented approach that seeks to deliver monthly income

An efficient complement to a well-diversified portfolio

ETF education centre

Gain a deeper understanding of factor investing at the Fidelity education centre.

 

Read a fund’s or pool’s prospectus or offering memorandum and speak to an advisor before investing. Read our privacy policy. By using or logging in to this website, you consent to the use of cookies as described in our privacy policy.

This site is for persons in Canada only. Mutual funds and ETFs sponsored by Fidelity Investments Canada ULC are only qualified for sale in the provinces and territories of Canada.

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