From 24/7 Wall St. · Ryne Mauck · · 1m 30s
Fidelity's dividend fund beats BlackRock on value
A cheaper Fidelity international dividend ETF matches BlackRock's returns while charging less than half the fee.
In brief
A cheaper Fidelity international dividend ETF matches BlackRock's returns while charging less than half the fee. FIDI charges 0.18% versus IDV's 0.50%, saving $320 annually on a $100,000 investment while delivering comparable performance. Originally reported by 24/7 Wall St..
BlackRock's IDV dominates dividend income
IDV targets 100 high-yielding developed-market stocks outside the US and returned 28.3% over the past year with a yield above 5%.
“IDV screens for high-yielding stocks in Europe, the UK, Australia, and Japan, and delivers a payout most US-only income funds cannot match.”
The fee gap compounds silently
IDV charges 0.50% annually while Fidelity's FIDI charges just 0.18%, a 32 basis point difference that costs $320 yearly on a $100,000 position.
“The fee gap is the load-bearing piece of this swap. It is a permanent, contractual haircut that IDV takes off your total return every year.”
FIDI kept pace on total returns
Over the trailing year, FIDI delivered 27% total return versus IDV's 28.3%, nearly matching performance while charging less than half the fee.
“Over the trailing year, FIDI delivered a total return of roughly 27.0%, with a price-only gain of 24.24%. IDV's price-only return was 28.3%.”
FIDI spreads risk across sectors
FIDI holds European energy majors, Canadian banks and pipelines, Japanese autos, Australian utilities, and UK tobacco names with no single position exceeding 3.7%.
“FIDI's top position is Equinor ASA at 3.7%, followed by TotalEnergies at 3.6% and Canadian Natural Resources at 2.9%.”
IDV still wins on current yield
IDV's yield is meaningfully higher than FIDI's 3.89%, and IDV is larger with tighter spreads and deeper liquidity for big trades.
“IDV's yield, based on its recent distribution pace, is meaningfully higher than FIDI's 3.89% yield.”
Tax matters when switching
In tax-advantaged accounts, the switch is simple. In taxable accounts, check your cost basis first to avoid a large capital gains bill.
“If you bought IDV in the last couple of years and are sitting on the roughly 28% one-year gain, the capital gains bill may exceed several years of fee savings.”
FIDI is the better choice for most
For cost-conscious international income investors, FIDI delivers comparable returns with less than half the annual fee, making it the better vehicle going forward.
“FIDI does most of the same job with less than half the annual fee and comparable recent returns.”
The big picture
FIDI charges 0.18% versus IDV's 0.50%, saving $320 annually on a $100,000 investment while delivering comparable performance.
