A 3% Yielding ETF That Pairs Well With SCHD

"Why Have One When You Can Have Both?"

Apr 14, 2026

As you know by my name, I love dividends. And in addition to sharing on here, I write regularly on the investment platform- Seeking Alpha.

My goal there is to teach everyday investors about building wealth, so they won’t to need to work to traditional retirement age.

I want to help you take control of your life, have F.I.R.E.

Here at Dividend Collection Agency the goal is to give investors and/or readers a different perspective. We take a simple approach to building wealth. And although investing may seem easy, people often miss opportunities by over complicating it.

But we are here to help.

Current Price: $57.49

At the time of writing, markets are pushing higher as investors begin to assume that the ongoing conflict with Iran is nearing an end. This shift in sentiment has helped fuel a short-term rally across equities after weeks of volatility.

However, I’m not fully convinced.

In my opinion, the market may be underestimating the likelihood of continued tension. Geopolitical conflicts rarely resolve quickly, and if negotiations stall, we could see another wave of volatility hit risk assets.

For long-term investors, though, this is where opportunity begins to show up.

Tech Weakness Is Creating Opportunity 💻

The recent pullback has been led by Technology (XLK) — the same sector that carried markets in 2025.

• Tech (XLK) is down double digits YTD

• Nasdaq (NDAQ) is down ~13%

• S&P 500 (VOO) is down ~6%

Meanwhile, dividend-heavy funds like Schwab U.S. Dividend Equity ETF (SCHD) have held up well due to Energy (XLE) exposure benefiting from the war.

But markets rotate.

What’s outperforming today isn’t always what leads tomorrow.

Why FDVV Stands Out 🎯

One ETF that looks increasingly attractive after the pullback is the Fidelity High Dividend ETF (FDVV).

After the recent correction:

• 💰 Yield has moved above 3%

• 📉 Price sits around $55 (vs. $60 highs)

• ⚖️ Less severe drawdown vs. pure tech funds

What makes FDVV compelling is its structure. It’s not just chasing yield — it’s combining income with growth exposure, which is exactly what many investors are missing.

Built Different: Growth + Income 🧩

FDVV’s portfolio is designed to balance offense and defense.

• 💻 ~24% Technology exposure (growth driver)

• 🏦 Financials for income stability

• 🛍️ Consumer sectors for resilience

• 🌍 International exposure for diversification

Top holdings include:

• NVIDIA Corporation (NVDA)

• Apple Inc. (AAPL)

• Microsoft Corporation (MSFT)

• The Coca-Cola Company (KO)

• Procter & Gamble (PG)

• McDonald’s Corporation (MCD)

This mix helps limit downside while still giving exposure to long-term growth trends like AI.

Rebalance: A Long-Term Bet 🔄

FDVV recently made a bold move by removing Energy exposure (~9%).

Short term, that may look like bad timing given Energy’s rally.

Long term, I think it’s intentional.

• ❌ Reduced reliance on cyclical Energy

• 📈 Increased focus on sustainable dividend growth

• 🌍 Maintained global diversification

This is a portfolio built for where the market is going — not where it’s been.

Income That’s Actually Growing 💰

FDVV isn’t just about yield — it’s about growth in that income.

• 📈 Latest distribution: $0.44/share

• 🚀 ~18% year-over-year growth

• 💵 Yield: ~3.07%

Comparison to Schwab U.S. Dividend Equity ETF:

• Yield: ~3.46%

• Expense ratio advantage (0.06% vs 0.15%)

• Better tax efficiency

But here’s the trade-off:

FDVV offers faster dividend growth + more upside potential

The AI Tailwind 🤖

FDVV’s performance over the last few years has been driven by its exposure to Technology.

• 2025 return: ~17%

• Outperformed SCHD in recent years

• Benefited from AI-driven market leadership

Looking ahead, I don’t see AI slowing down anytime soon. Capital spending in AI is still in the early innings, and FDVV is positioned right in the middle of it.

FDVV vs SCHD (Simple Breakdown) ⚖️

FDVV:

• More growth exposure

• Faster dividend growth

• Slightly lower yield

SCHD:

• Higher yield

• More defensive

• Better cost + tax efficiency

Best move? Use both together for a balanced income strategy.

Risks to Keep in Mind ⚠️

Let’s not ignore the downside.

• Prolonged Iran conflict → market volatility

• Continued tech weakness

• Potential recession scenario

If markets pull back further, FDVV could underperform in the short term.

But long term?

👉 That’s where opportunity tends to show up.

Bottom Line ✅

While markets are currently pricing in a resolution to geopolitical tensions, I remain cautious. Volatility is likely to stick around, and we could see more downside before things stabilize.

That said, this environment is exactly where long-term investors should be paying attention.

FDVV offers:

• ✔️ A growing income stream

• ✔️ Exposure to long-term tech trends

• ✔️ A balanced, diversified portfolio

And after the recent pullback, it’s starting to look a lot more attractive. FDVV looks like a core holding candidate for investors who want both income and upside.

Would you put FDDV in your portfolio? Let me know in the comments.

Happy Investing!

☎️ If you’re looking to create passive income and build your wealth from one of the top-rated analysts, book a call (Let’s Talk Investing or Detailed Portfolio Review) with me to get started.