3 Fidelity ETFs to Buy for High Yields and Portfolio Diversification
2026-09-27 08:20
•Marc Guberti •The Motley Fool
••• •••••• Axe Cap view
High-Yield ETFs: Diverse Income Plays with a South African Lens
Three Fidelity ETFs offer different ways to balance yield, growth, and risk with some global flavour for rand investors.
South African investors chasing yield often find local fixed income yields attractive but limited in diversification. The Fidelity dividend ETF FDVV could be worth a look for steady income combined with capital growth, thanks to top US tech dividend payers like Apple and Microsoft. Its moderate 2.6% yield isn’t flashy, but it has historically delivered solid double-digit returns. For those wanting high income and willing to stomach tax complexity, FYEE’s covered call strategy yields north of 9%, but distributions get taxed as regular income – not ideal here given SA’s tax setup. Finally, FIDI brings a meaningful international equity diversification to a local portfolio with a 3.9% yield and near-20% recent returns, cutting tech heavy bias and currency exposure by mixing regions. The key local angle is the rand’s vulnerability: a weaker USD/ZAR boosts these USD-denominated ETFs’ returns in rand terms, making dollar strength a key driver. If the rand strengthens unexpectedly or US equities falter sharply, these ETFs could disappoint. this is just our opinion and not financial advice
For sensible yield exposure and diversification, I’d buy into FDVV with a watchful eye on rand moves. FYEE is worth a small position if held in a tax-advantaged vehicle, otherwise avoid. FIDI is a good trim-and-hold for international exposure but expect volatility. Stay nimble around USD/ZAR swings.
- FDVV
- FYEE
- FIDI
- USD/ZAR
- Rand strengthening reducing rand returns
- US equity market correction
- Tax treatment impacting after-tax yield on FYEE
6/10
The article highlights three Fidelity ETFs designed for investors seeking high yields with portfolio diversification and lower volatility. FDVV focuses on dividend-paying large and mid-cap companies with a 2.63% yield and 13.2% annualized returns over a decade. FYEE uses covered calls on S&P 500 stocks to generate a 9.11% yield but with tax implications. FIDI offers international diversification with a 3.89% yield and 19.9% annualized three-year returns, avoiding tech sector concentration.
Our take is based on reporting first published by The Motley Fool.