Summary
FDV Chart
FDV: Low Beta To Detract From Returns, Outperformance Unlikely To Last
Federated Hermes US Strategic Dividend ETF is an actively managed ETF targeting "high dividend-paying U.S. stocks with dividend growth potential." I maintain a Hold rating on FDV, as I expect its YTD edge over IVV to dissipate in the coming months. I currently favor GARP and quality factors and remain cautious about low volatility and value, and FDV is heavy in the latter two, which will restrain upside capture.
FDV: Moderate Earnings Growth Key To This Active Dividend ETF's Success (Rating Upgrade)
FDV is an actively managed large-cap dividend ETF comprised of about 50 U.S. securities. Its net expense ratio is 0.50% and the fund has $612M in assets under management. Underpinning the strategy is the belief that high-dividend stocks will outperform the market with less volatility over the long run. Managers cite research over the last 50 years as support. While FDV has struggled to keep up with similar-yielding peers since its November 2022 launch, a material improvement in its portfolio-level earnings growth rate is a reason to be optimistic.
FDV: Active Dividend ETF With Performance Restrained By Low Beta
With its 2.9% dividend yield, actively managed FDV offers healthy factor exposures, but its focus on low beta has led to its inability to keep pace with the S&P 500. SCHD remains a superior alternative thanks to its stronger factor profile, higher dividend yield, and lower expenses compared to FDV. While FDV has some merits and deserves investor attention, I see little justification for a rating other than Hold.
Federated Hermes U.S. Strategic Dividend ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| BZ Brandon Zatopek Commonwealth Equity Services LLC | 67,947 | $2.13M | $2.13M | - | - |
| AB Anthony Bruccoleri Equitable Holdings Inc. | 150,990 | $3.82M | $4,739.58 | -$3.81M | -99.88% |
 Jodi Greenlund Financial Council LLC | 9,067 | $279,263.6 | $299,029.66 | $19,766.06 | 7.08% |
 Lukas Lindgren Abound Wealth Management | 154 | $4,743.28 | $5,078.92 | $335.64 | 7.08% |
 Bert D. Barre Colonial Trust Co. / SC | 1,753 | $50,170.86 | $50,170.86 | - | - |
Federated Hermes U.S. Strategic Dividend ETF (FDV) FAQ
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Federated Hermes U.S. Strategic Dividend ETF Profile
| ARCA Exchange | US Country |
Overview
The fund is predominantly focused on investing in high dividend-paying common stocks of U.S.-based issuers that demonstrate potential for dividend growth. It leverages the expertise of its Advisors to pick stocks from primarily large-cap or mid-cap U.S. companies, aiming to generate income for its investors through dividends. The fund's investment strategy relies on a thorough selection process to identify U.S. issuers that are not only domiciled and/or operate within the United States but are also listed on U.S.-based exchanges, ensuring a focus on domestic markets.
Products and Services
- High Dividend-Paying Common Stocks Investment
- Dividend Growth Potential Focus
- Large-Cap and Mid-Cap U.S. Stocks Investment
This product centers around investing in common stocks of U.S. companies that offer high dividend payments. The main attraction is the potential for recurrent income through dividends, making it suitable for investors looking for steady income streams from their investments.
The fund not only seeks high dividend yields but also prioritizes investments in companies with the potential for dividend growth. This approach aims to provide investors with not just immediate income but also the prospect of increasing returns over time, aligning with long-term investment goals.
Investment in large-cap and mid-cap stocks is a significant part of the fund's strategy. These stocks are chosen for their potential stability and growth within the U.S. market. By focusing on companies with a substantial market capitalization, the fund seeks to combine growth potential with a considerable degree of safety.
