What does 'expense ratio' mean in the context of ETFs?

The expense ratio represents the annual fee charged by the fund provider, expressed as a percentage of the assets. It covers management costs, administration and other operational expenses. For CGDV, the expense ratio is 0.33%, while for FDVV, it is 0.15%. The difference of 0.18 percentage points means that for every £1,000 invested, FDVV charges £1.80 less in annual fees compared to CGDV. This fee structure can influence long-term net returns.

What is the impact of expense ratios on long-term investment returns?

Over time, higher expense ratios can reduce net returns as they are deducted from the fund's assets annually. For example, a 0.33% expense ratio like CGDV's will result in slightly less compound growth compared to a 0.15% expense ratio like FDVV's. However, the actual impact depends on factors such as investment performance and the length of the investment period. Investors should consider the trade-off between cost efficiency and other fund characteristics.

How do ETFs handle dividend payments?

ETFs collect dividends from the underlying stocks held in their portfolio. Instead of distributing these dividends immediately, some ETFs accumulate them and distribute them periodically, often monthly or quarterly. Others may reinvest dividends back into the fund, increasing the NAV. CGDV has a dividend yield of 1.17%, while FDVV offers a higher yield of 2.74%. Investors should check the distribution frequency and method specific to each ETF.

Which fund is more suitable for cost-conscious investors?

FDVV, with a 0.15% expense ratio, offers better cost efficiency compared to CGDV's 0.33% expense ratio. The lower fees can improve net returns over the long term, making it a more cost-effective option for investors focused on minimising expenses. However, other factors such as yield, holdings and risk tolerance should also be considered when choosing between the two funds.

Which fund might be better for investors seeking higher dividend income?

FDVV provides a dividend yield of 2.74%, which is significantly higher than CGDV's 1.17%. For investors focused on generating consistent income, FDVV may be more suitable. However, a higher yield does not always indicate better performance and could reflect different investment strategies or market conditions. It is essential to consider both yield and total return potential.

How do the top holdings of CGDV and FDVV differ?

Both funds share top holdings, including MSFT, NVDA, AVGO, and GOOGL, indicating some overlap. However, FDVV includes additional tech stocks like AAPL and DELL, while CGDV features names such as RTX, GE, and RCL. FDVV's greater tech concentration may increase volatility but also potentially boost returns in tech-driven markets. Investors should evaluate how much overlap and diversification they prefer.

How important are top holdings in comparing ETFs?

Top holdings indicate the sectors and companies where the fund is most exposed. Both CGDV and FDVV have significant tech exposure, but FDVV includes more prominent tech names like AAPL and DELL, while CGDV diversifies with names like RTX and GE. Investors should consider how the overlap and concentration align with their preferences. A high concentration in a few stocks can increase risk, while broader diversification can reduce volatility.

How does the dividend yield of each fund affect investor decisions?

A higher dividend yield, as seen in FDVV (2.74%), typically appeals to income-focused investors seeking regular distributions. CGDV's lower yield of 1.17% might be more suitable for investors prioritising growth or capital appreciation. However, a higher yield may also indicate higher risk or a strategy focused on mature, cash-generating companies. Investors should balance yield considerations with overall portfolio goals and risk tolerance.

How do liquidity differences between CGDV and FDVV influence investing?

CGDV has a much larger asset base of $38.3 billion compared to FDVV's $10.3 billion, implying greater liquidity. This means CGDV may offer narrower bid-ask spreads and more ease when trading large quantities. Investors trading infrequently or with smaller amounts might not notice this difference, but those requiring immediate access to liquidity could benefit from CGDV's higher trading volume.

What should investors consider regarding the inception date of each fund?

FDVV, with an inception date of September 12, 2016, offers a longer operating history, allowing for more comprehensive performance assessment. CGDV, established on February 22, 2022, has a shorter track record. Investors may prefer FDVV for its established performance history, but this should be considered alongside other factors like current fund strategy, expense ratio and holdings.

How can investors evaluate the overlap between the two funds?

Investors can assess overlap by examining the shared top holdings, which include MSFT, NVDA, AVGO, and GOOGL. A higher overlap means the funds may behave similarly in specific market conditions. Those seeking distinct exposure might look for funds with less overlap, while investors comfortable with concentration may not be concerned. Understanding overlap helps ensure the portfolio is diversified according to one's risk preferences.

What is the difference between active and passive management in the context of these ETFs?

The provided data does not specify the management style. Active management involves a manager selecting securities to outperform the market, while passive management aims to track an index. Investors should consult the fund's prospectus or official documentation to determine the management style. This information is critical as active management may offer flexibility but could come with higher fees compared to passive strategies.

CGDV vs FDVV

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare Capital Group Dividend Value ETF (CGDV) and Fidelity Covington Trust High Dividend ETF (FDVV). This page examines expense ratios, holdings, dividends and tracking methods to help you understand the differences between these large value funds. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

CGDV

Metric

FDVV

0.33%

Expense Ratio

0.15%

1.17%

Dividend Yield

2.74%

$38.26B

Net Assets

$10.34B

Holdings

109

Feb 22, 2022

Inception Date

Sep 12, 2016

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Index Tracked

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Large Value

Fund Category

Large Value

FDVV costs about $18.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	CGDV	FDVV
MSFTMicrosoft Corporation	7.59%	5.30%
NVDANVIDIA Corporation	6.56%	7.28%
AVGOBroadcom Inc.	4.60%	2.81%
GOOGLAlphabet Inc.	3.73%	1.93%

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Investment Analysis

CGDV

Pros

Large asset base supports liquidity
Reputable issuer with active management
Low overlap with defensive income stocks

Considerations

Higher expense ratio reduces net returns
Modest dividend yield limits income potential
Limited track record since 2022 inception

FDVV

Pros

Low expense ratio improves cost efficiency
Substantial yield supports income-oriented investors
Longer operating history aids performance assessment

Considerations

Smaller asset base may limit liquidity depth
Notable concentration in large technology equities
Higher value factor exposure increases volatility

About CGDV and FDVV

CGDV (CGDV)

The Capital Group Dividend Value ETF (CGDV) is a large-cap value fund designed to provide investors with exposure to dividend-paying companies. Launched in February 2022, it holds a concentrated portfolio of 59 positions, focusing on established firms with potential for income and value appreciation. The fund carries an expense ratio of 0.33%, which is moderate for an actively managed ETF strategy. With net assets of USD 38.26 billion, it offers substantial liquidity. Investors should note its current dividend yield of 1.17%, which provides modest income compared to high-yield sectors. As with all value strategies, performance can vary significantly depending on market cycles and economic conditions. It is important to remember that capital values can rise as well as fall, and dividends are not guaranteed. This fund suits those looking for a balanced approach to large-cap value investing within an ETF wrapper, but thorough personal research is always recommended before making any investment decisions.

FDVV (FDVV)

The Fidelity Covington Trust High Dividend ETF (FDVV) is a large value fund designed to provide exposure to equities with higher-than-average dividend yields. With net assets of USD 10.34 billion and a modest expense ratio of 0.15%, it offers investors a relatively cost-efficient way to access a diversified portfolio of 109 holdings. Since its inception in September 2016, the fund has focused on companies that are often viewed as stable income generators. The current dividend yield stands at 2.74%, making it a potential component for those seeking regular income alongside capital appreciation. However, it is important to remember that values can rise and fall, and returns are not guaranteed. This fund suits investors interested in large-cap value strategies, though all investments carry risk and should be considered alongside personal financial goals.

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CGDV vs FDVV

Fund Snapshot