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While the Federal Reserve left interest rates unchanged at the latest meeting, investors increasingly speculate that rate hikes are on the table in 2026.
With odds of a 2026 rate hike getting shorter, the Fidelity Dividend ETF For Rising Rates is a fund to consider.
Fidelity Dividend ETF For Rising Rates targets large- and mid-cap dividend payers with positive correlation to Treasury yields. FDRR offers value characteristics and dividend growth outpacing inflation but has underperformed SPY and key competitors. Despite its 'rising rates' pitch, FDRR lagged during the strongest rate upcycle in decades.
Retirees building income portfolios in 2026 face a genuine tension: bond yields have pulled back from recent highs, dividend stocks feel crowded, and the funds marketed as “rate-resilient” often look nothing like their names suggest once you open the hood.
Ameritas Advisory Services LLC trimmed its position in Fidelity Dividend ETF for Rising Rates (NYSEARCA:FDRR) by 99.9% in the third quarter, according to its most recent disclosure with the SEC. The institutional investor owned 1,048 shares of the company's stock after selling 720,772 shares during the period. Ameritas Advisory Services LLC's holdings
Fidelity and Vanguard both offer relatively limited rosters of dividend exchange-traded funds (ETFs). Both are winners for different reasons, but each of their dividend ETFs has some flaws.
This ETF has rising rates protection in its DNA. Despite its name, it can thrive even if rates don't rise.
Fidelity Dividend ETF for Rising Rates has shown limited effectiveness as a hedge in rising rate environments. FDRR has underperformed the S&P 500 since inception, and performance has aligned more closely with dividend growth funds. Significant technology sector exposure reduces FDRR's risk of underperformance during a falling interest rate regime.