Fidelity US Quality Income ETF

[dreampreneur]

I was recently comparing high dividend ETFs to plain indexes. The general rule is that index like S&P500 has lower dividends (+- 1.5% compared to +- 2.5%) and higher growth than his dividend counterparts (e.g. any S&P500 high dividend yield ETF).

But there is an exception, Fidelity US Quality Income ETF
https://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0001A3ET

It has growth like a plain S&P500 ETF and dividends like a high dividend ETF +-2.5%. How is it possible? Can someone explain this mystery to me?

[waltworks]

Lookback tests always find some weird outliers. That performance probably won't continue going forward.

-W

[MustacheAndaHalf]

I suspect there's a lot more going on that OP realizes.

Let's say you just converted British pounds into U.S. dollars and did nothing else - you'd have a gain this year, as USD has grown strong against most currencies.  So that's a factor in performance, and I suspect is why Fidelity and Morningstar don't match.
https://www.fidelity.fi/funds/factsheet/IE00BYXVGX24/tab-performance-risk

Fidelity shows a dividend yield of 2%, while Morningstar shows an empty dash for "12 Month Yield".  That's higher than the overall U.S. market, but not excessive.

The way that dividend is achieved is through buying dividend paying U.S. stocks, likle it's top 2 holdings Apple and Microsoft.  According to Morningstar, those companies are -15% and -18% YTD, a far greater loss than their dividends.  This Fidelity Quality ETF has lost 9% YTD, and May 2022 data isn't included yet.
https://www.fidelity.fi/funds/factsheet/IE00BYXVGX24/tab-portfolio
https://www.morningstar.com/stocks/xnas/aapl/trailing-returns
https://www.morningstar.com/stocks/xnas/msft/trailing-returns

Hopefully with that information you can make a more informed decision about investing.

[dreampreneur]

Thanks! I consider the plain indexes to be most transparent = safer, than a fancy-pants aristocrats ETF. Just wanted to make sure I'm not missing a piece of the puzzle.

[ChpBstrd]

A fund with a large cap value tilt probably owned a lot of oil companies. That's my explanation.