FDRR vs VIG

FDRRBFidelity Dividend ETF for Rising Rates

VIGAVanguard Dividend Appreciation ETF

In short

FDRR Most dividend funds ignore interest rates. FDRR is built around them: Fidelity's rate-aware spin on dividend equity, running since 2016 and priced at 0.15% a year, well under the typical dividend-screen fund.

VIG VIG buys dividend growth, not fat yields: about 300 US companies with a record of raising their payouts, tracked for 0.04% a year. Running since 2006 and now north of $100 billion, it is the plain-vanilla anchor of the dividend-screen aisle.

Stated mandate

FDRR The fund seeks to track, before fees and expenses, the performance of the Fidelity Dividend Index for Rising Rates.

VIG The fund seeks to track the S&P U.S. Dividend Growers Index, which represents common stocks of companies with a record of increasing dividends over time.

Why people hold it

• FDRR 0.15% a year against a roughly 0.39% median for dividend-screen ETFs. You get a rules-based twist most index shops don't sell, at a below-median price.
• The mandate is right there in the index name: the Fidelity Dividend Index for Rising Rates. A dividend basket screened with rate moves in mind, not just the fattest yields on the board.
• About 130 stocks, quarterly distributions, and a live track record back to 2016. This is a seasoned product, not a themed launch chasing a headline.
• Lands in the upper half of a crowded dividend-screen field of roughly 50 funds, with high confidence in the underlying data.

• VIG At 0.04% a year, the fee is roughly a tenth of the typical dividend-screen fund's 0.39%, and undercuts every other top-graded fund in the group, DGRO and SCHD included.
• The screen rewards a record of increasing dividends rather than the biggest current payout, so the basket leans on payout discipline instead of stretched yields.
• Live since 2006, over $100 billion in assets and actively traded, which shows up as easy fills rather than wide spreads.
• About 300 holdings, cash paid quarterly, and one of the strongest overall implementations in its dividend-screen peer group.

Worth knowing

• FDRR Thinly traded next to the category's giants. Spreads deserve a look before you hit the button, especially on larger orders.
• The core dividend heavyweights undercut it on fee: VIG at 0.04%, SCHD at 0.06%, DGRO at 0.08%. The rate screen is what you're paying the difference for.
• A rate-aware screen builds in sector tilts a plain dividend index won't have, so results can drift from the broad dividend crowd in either direction.

• VIG Growth of payouts, not maximum income, is the mandate. That puts it on a different axis than high-dividend funds such as SPYD.
• US stocks only, no bonds and no overseas payers, and sector weights are whatever the index screen spits out.
• Portfolio risk and concentration measures land mid-pack for the category: it is fully invested in equities and drops when the market drops.

Full FDRR profile⁠

Full VIG profile⁠