What HDV actually is

HDV is an iShares ETF built around an index of income-paying securities screened for superior company quality and financial health, as determined by Morningstar’s methodology. It invests at least 80% of its assets in the index components.

It launched in 2011. The fund is classed as non-diversified, meaning it can hold large positions in a small number of companies.

What is inside

The portfolio is relatively concentrated in large, established companies, and it tends to hold a lot in a few sectors such as energy, healthcare and consumer staples. Large positions in a handful of names make it behave differently from a broad fund.

Distributions

HDV passes on the dividends of its holdings regularly, and its yield is typically above that of a broad market fund. Check the fund’s current yield, fees and distribution schedule on the issuer’s website, because they change.

What to keep in mind

  • Concentration. A few big holdings can drive performance.
  • Sector tilt. Energy and defensive sectors carry a lot of weight.
  • Quality screens vary. Different providers define quality differently.
  • Market risk. It falls with the market.

Quick take

HDV pairs a high-yield approach with a quality filter but is more concentrated than many dividend ETFs. Compare it with SCHD and VYM.