Federated Hermes U.S. Strategic Dividend ETF

Federated Hermes U.S. Strategic Dividend ETF (FDV) is an actively managed fund. Rather than tracking an index, its managers pick about 50 U.S. large- and mid-cap stocks that pay above-average dividends and have room to raise them. It pays income monthly and aims to be less volatile than the broader market. The trade-off is cost. Its 0.50% expense ratio is the highest of nine similar dividend funds, compared with 0.06% for Schwab US Dividend Equity ETF (SCHD).

• Over the year to Oct 27, 2026, FDV returned +20.7%, 6th of 9 among similar funds.
• Its worst full calendar year was 2023 (-2.1%); its best was 2024 (+14.3%).
• The deepest fall in its price history was 16.7% (Jan 6, 2023 to Oct 27, 2023), recovered by Mar 28, 2024.

As of Jul 31, 2026, the fund held 49 securities; the ten largest made up 34.86% of assets.

By sector

• Over the three months to Jul 31, 2026, investors added a net $115.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.47%, +0.76%, +5.28%.

FDV does not follow an index. The adviser, part of Federated Hermes, chooses each stock. It looks for "high dividend-paying" stocks, which it defines as stocks yielding more than the S&P 500 average. It ranks candidates on a mix of dividend yield and the potential for future dividend growth. Before ranking, it checks balance sheet strength, earnings growth and how dependable a company's cash flow is. The top-ranked names then get detailed company-by-company research before they go into the portfolio. The adviser also aims for lower volatility than the broader market.

At least 80% of net assets must be in dividend-paying U.S. companies, and shareholders get 60 days' notice before that rule changes. The fund defines "U.S." broadly. A company can count if its shares trade mainly on U.S. exchanges or it earns at least half its revenue in the U.S. That is why Medtronic (incorporated in Ireland) and Amcor (Jersey) appear. The fund may also own real estate investment trusts (REITs), such as Prologis and Kimco Realty.

The prospectus text sets no fixed formula for weighting holdings and no rebalancing schedule. Position sizes are up to the manager. As of July 31, 2026, the fund held 49 stocks, and the top 10 made up about 35% of assets. Paychex (4.4%) and PNC Financial (4.3%) were the largest. The fund used no leverage, options or other derivatives, and cash was 0.3%. Portfolio turnover was 37%.

• FDV charges 0.5% a year, versus an average of 0.3% for the similar funds below (9th of 9, cheapest first).
• Of that, 0.6% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.11% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $62 in the first year and $762 over 10 years (assuming a 5% annual return).

FDV pays dividends monthly from a portfolio of established U.S. dividend payers and aims for lower volatility than the broader market.

FDV pays monthly, which can help someone drawing a regular income. Over the 12 months to October 27, 2026, it paid $0.95 per share, a 2.83% yield. Those payments are not guaranteed. The prospectus warns that companies can cut their dividends. The fund launched in November 2022, so it has no record from the 2008, 2020 or 2022 market crashes. Its worst calendar year was 2023, a loss of 2.1%. Its deepest drop was 16.7%, from January 6 to October 27, 2023. It regained its earlier peak by March 28, 2024, five months after the low. A retiree who sold shares near that low would have locked in a loss. Costs add up too: on the SEC's standard $10,000 example, expenses come to $62 after one year and $762 over ten. Past results don't predict future ones, and a retirement plan should look at the whole portfolio, not one fund.

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