Fidelity Dividend ETF for Rising Rates

Fidelity Dividend ETF for Rising Rates (FDRR) is an index fund that tracks the Fidelity Dividend Index for Rising Rates. The index holds large and mid-sized dividend-paying companies, mostly in the US. What sets it apart is a screen for stocks whose returns have tended to rise along with 10-year Treasury yields. Its 0.15% expense ratio matches the average of similar funds, and its yield was 2.01% as of October 27, 2026.

• Over the year to Oct 27, 2026, FDRR returned +18.0%, 1st of 9 among similar funds.
• Its 5-year annualized return was +13.0% and its 10-year +13.9%.
• In the 2020 COVID crash it fell 36.1% and regained its old high 7.8 months after the low.
• Its worst full calendar year was 2022 (-9.7%); its best was 2019 (+26.9%).
• The deepest fall in its price history was 36.5% (Feb 12, 2020 to Mar 23, 2020), recovered by Nov 24, 2020.

As of Jul 31, 2026, the fund held 111 securities; the ten largest made up 42.01% of assets.

By sector

• Over the three months to Jul 31, 2026, investors added a net $3.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +5.96%, -2.42%, +3.92%.

FDRR is a passive fund. It puts at least 80% of its assets into stocks in the Fidelity Dividend Index for Rising Rates, which follows a rules-based method Fidelity created. Within each sector, stocks get a combined score built from four traits: high dividend yield, a low payout ratio (the share of profits paid out as dividends), strong dividend growth, and returns that have tended to rise when 10-year Treasury yields go up. Scores are then adjusted for company size, and the top scorers in each sector make the index.

Each sector gets the same weight it has in the broader stock market, so the fund does not lean toward or away from any one industry. Within a sector, each stock is weighted by market value, plus an equal extra amount for every stock in that sector. As a result, the biggest companies still dominate. As of July 31, 2026, the fund held 111 stocks. NVIDIA made up 8.1%, Apple 7.6%, Microsoft 6.0% and Alphabet 5.4%. Technology was 33% of the fund and the top 10 holdings were 42%.

Foreign stocks can make up as much as 10% of the index when it rebalances. US companies were 91.6% of the fund as of July 31, 2026. The fund lends securities to earn extra income. Starting December 11, 2025, derivatives (contracts that track the price of other assets) can count toward its 80% rule. Its portfolio turnover was 27%.

• FDRR charges 0.15% a year, versus an average of 0.15% for the similar funds below (4th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $15 in the first year and $192 over 10 years (assuming a 5% annual return).

It spreads money across 111 large and mid-sized companies, keeps sector weights in line with the broad market and costs 0.15% a year, so it can work as a main stock holding with a modest dividend tilt.

FDRR could serve as a main US stock fund that pays some income. It pays dividends quarterly, and its trailing yield was 2.01% as of October 27, 2026. The cost is low: the SEC's standard example puts it at $15 in the first year on $10,000. The fund launched in 2016, so it has no record from the 2008 crisis. In the 2020 COVID crash it fell 36.1% and took about eight months to recover. In the 2022 bear market, a year of sharply rising rates, it fell 20.9% and needed 14.5 months to get back to its peak. Its worst calendar year was 2022, at -9.45%. Anyone drawing income in a slump like that might have to sell shares at low prices. A reserve of cash or bonds is a common way to plan for this. Past results don't predict the future, and a plan should weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.