FDRR Profile
Fidelity Dividend ETF for Rising Rates is strategically designed to provide investors with exposure to dividend-paying companies that are well-positioned to benefit from a rising interest rate environment. The fund invests at least 80% of its assets in securities that are constituents of its underlying index, as well as in depository receipts representing these securities. This investment strategy aims to closely track the performance of the index, which includes stocks of large- and mid-capitalization companies known for their dividend payments and growth potential.
The underlying index targets companies that are expected to continue paying and growing their dividends, even in a rising interest rate environment. It focuses on dividend-paying stocks with a positive correlation to increasing 10-year U.S. Treasury yields. This means the index aims to select companies whose dividend yields are likely to perform well when interest rates rise, reflecting the anticipated impact of higher Treasury yields on equity returns.
Managed by Fidelity Investments, the ETF benefits from the firm's extensive experience and research capabilities in dividend investing and interest rate dynamics. Fidelity's investment team employs rigorous analysis to select companies that align with the index’s criteria, ensuring a focus on those with robust dividend histories and growth prospects. The firm’s expertise in navigating interest rate cycles supports the fund’s objective of delivering attractive income while adapting to changing macroeconomic conditions.
The Fidelity Dividend ETF for Rising Rates leverages Fidelity’s deep understanding of dividend strategies and interest rate impacts to offer a tailored investment solution. The fund’s management approach emphasizes a disciplined selection process, aiming to provide investors with a stable income stream and potential capital appreciation in a rising interest rate environment. By focusing on companies with strong dividend fundamentals, the ETF seeks to enhance investor returns while managing interest rate risk.
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