Three Everlasting Fidelity ETFs to Acquire and Persist in Owning, Yielding Annually $100,000 in Dividend Revenue, Commencing in 2025
Investing in a substantial savings pot can take decades, but once you've amassed it, it can generate a substantial income stream for your entire lifetime. Even if you've got a more modest financial cushion, it's worth exploring the income potential of various investment instruments. Let's delve into three Fidelity exchange-traded funds (ETFs) to see what they can deliver.
Fidelity International Value Factor ETF
First up is the Fidelity International Value Factor ETF (FIVA 0.42%).
This ETF focuses on international mid and large-cap value stocks. It boasts a solid 3.5% dividend yield and a minimal expense ratio of 0.18%. Top sectors include financials (25% of total holdings), healthcare (10%), and consumer durables (7%). However, risks include its heavy concentration in international stocks and a subpar performance history with a compound annual growth rate (CAGR) of just 2.9% since inception. Investing $3,000,000 in this fund would yield over $100,000 in annual dividend income based on the current yield.
Fidelity International High Dividend ETF
Next on the list is the Fidelity International High Dividend ETF (FIDI 0.29%).
This Fidelity ETF tracks a proprietary index of fewer than 100 international dividend-paying stocks. It offers an impressive 5.7% dividend yield and an expense ratio of 0.18%. The fund's holdings are primarily European-based (52% of total), with 30% coming from the Asia Pacific region and less than 20% from North, Central, and South America. Top sectors include financials (32% of total holdings), utilities (11%), and communications (10%). Risks include its high concentration in international finance stocks and its underwhelming lifetime performance of 0.9%, which pales in comparison to U.S.-based benchmark indexes like the S&P 500. Investing roughly $1,820,000 in the fund would produce $100,000 in annual dividend income.
Fidelity Yield Enhancer Equity ETF
Lastly, we have the Fidelity Yield Enhancer Equity ETF (FYEE 0.56%).
This fund takes an innovative approach to generating income by targeting both value stocks with generous dividends and growth stocks, even those without substantial dividends. The fund achieves its yield of 5.4% through the use of a covered call options strategy, in which call contracts are sold against the fund's core holdings to generate a steady income stream. Top holdings include Nvidia, Amazon, and Alphabet - all stocks with minimal or no dividends, but still contributing to the fund's income potential. Unlike the first two ETFs, this fund's investments are primarily American (96% of total). But risks include concentration risk in the "Magnificent Seven" stocks and a slightly elevated expense ratio of 0.28%. Investing $1,960,000 in this fund would generate $100,000 in annual distributions.
Utilizing the strategies of these ETFs can be a smart way to supplement your income from your savings pot, given their attractive yield rates. For instance, investing $1,820,000 into the Fidelity International High Dividend ETF could potentially bring in $100,000 annually in dividends. On the other hand, if you have a more substantial amount of money to invest, the Fidelity International Value Factor ETF could yield over $100,000 in annual dividend income with an initial investment of $3,000,000.
