Investing

3 Fidelity ETFs to Buy in February to Generate Big Passive Income In Retirement

Chris MacDonald

Published: February 12, 2025 3:25 pm

For those looking to build a portfolio of income-producing assets that may allow one to live off of dividends in retirement (without having to sell much, if all, of one’s invested shares), the following three Fidelity ETFs may be worth considering.

For investors looking for outsized exposure to dividend stocks with meaningful yields, here are three great Fidelity ETFs to consider right now.

Key Points About This Article:

• Fidelity is among the leading providers of exchange traded funds retirees may want to consider for their breadth of offerings.
• For those looking to create meaningful passive income streams in retirement, here are three top Fidelity ETFs to consider right now.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Fidelity International High Dividend (FIDI)

Fidelity International High Dividend ETF (FIDI) presents a compelling investment opportunity for 2025 due to its strategic focus on high dividend-paying international companies. The fund aims to track the Fidelity International High Dividend Index, which includes large- and mid-cap stocks expected to sustain and grow their dividends. As of January 2025, FIDI boasts a 30-day SEC yield of 5.67%, making it attractive for income-seeking investors. Its expense ratio is low at 0.18%, which enhances net returns compared to many competitors.

Over the past year, FIDI has shown resilience, with a 1-year total return of approximately 0.30% despite challenging market conditions, indicating its potential for stability and income generation. The fund’s diversified holdings across sectors—particularly in financials (31.56%)—position FIDI well to benefit from global economic recovery and growth in dividend payouts.

Furthermore, the fund’s management employs a strategic beta approach, focusing on value-driven investments that can outperform traditional benchmarks in varying market conditions. FIDI’s combination of attractive yield, low costs, and a robust investment strategy makes it a noteworthy ETF for investors in 2025.

Fidelity Yield Enhanced Equity ETF (FYEE)

Fidelity Yield Enhanced Equity ETF (FYEE) presents a compelling investment opportunity for 2025 due to its unique strategy and strong performance metrics. Launched on April 9, 2024, FYEE is actively managed and primarily invests at least 80% of its assets in equity securities, focusing on companies with market capitalizations similar to those in the S&P 500 Index. As of December 31, 2024, the fund had a total of 158 holdings and a net asset value (NAV) of approximately $6.7 million, with a year-to-date return of about 13.02%.

The ETF employs a disciplined options-based strategy, including writing call options on a large-cap equity index, which enhances income generation while maintaining potential for capital appreciation. With a current price-earnings ratio of 25.6-times and a price/book ratio of 4.93, FYEE targets companies that are well-positioned for growth. 

Its top holdings include major tech firms like Apple, NVIDIA, and Microsoft, which collectively represent over 21% of the portfolio. Additionally, the fund’s expense ratio is relatively low at 0.28%, making it an attractive option for cost-conscious investors seeking income and growth in a diversified equity portfolio.

Fidelity International Value Factor ETF (FIVA)

The Fidelity International Value Factor ETF (FIVA) presents a compelling investment opportunity for 2025, particularly for those seeking exposure to undervalued international equities. As of January 2025, FIVA has demonstrated a year-to-date return of 1.5% and a one-year return of 6.2%, outperforming many peers in its category, which recorded an average return of -1.9% during the same period.

The ETF primarily invests in large- and mid-cap companies with attractive valuations, reflected in its price-earnings ratio of 11.3-times and price-book ratio of 1.2-times, indicating potential for growth as these stocks may be undervalued relative to their intrinsic worth. 

FIVA’s strategy also involves investing at least 80% of its assets in securities included in the Fidelity International Value Factor Index, which focuses on developed international markets.Its expense ratio is competitively low at 0.18%, enhancing its appeal for cost-conscious investors. Moreover, the fund’s diversification across 109 holdings mitigates risk while providing exposure to various sectors.