FDVV, DGRW, and BALI: Dividend ETFs with Magnificent Seven Exposure

Three Dividend ETFs That Keep AI Exposure

Dividend-focused investors have faced a dilemma as the Magnificent Seven stocks have driven market gains, often leaving traditional income portfolios behind. However, three exchange-traded funds (ETFs) offer a way to receive dividend income while retaining meaningful exposure to these tech giants: Fidelity High Dividend ETF (FDVV), WisdomTree U.S. Quality Dividend Growth Fund (DGRW), and iShares U.S. Large Cap Premium Income Active ETF (BALI). Each fund holds NVIDIA, Microsoft, Apple, and Alphabet among its top positions, but they differ in how they generate income and what they sacrifice to do so.

Traditional dividend ETFs like Schwab U.S. Dividend Equity ETF (SCHD) and Vanguard High Dividend Yield ETF (VYM) often exclude most Magnificent Seven stocks because their yields are too low. This can leave investors overweight in utilities and consumer staples while missing out on AI-driven growth. The three funds below were designed differently, using strategies that do not require every holding to have a high starting yield.

FDVV: A Balanced Approach with a Sector Cap

FDVV tracks an index that ranks U.S. large- and mid-cap stocks based on yield, payout ratio, and dividend growth, but with a sector cap that prevents it from becoming overly concentrated in utilities and REITs. As of its April 30, 2026, filing, NVIDIA accounted for 6.84% of net assets, Apple 5.69%, and Microsoft 4.49%, with combined Magnificent Seven exposure around 20%. The remaining 103 positions include dividend stalwarts like Duke Energy, NextEra, Realty Income, Procter & Gamble, Coca-Cola, and Altria, each at roughly 1-2% weightings, alongside international payers such as Stellantis and Danske Bank.

The fund's most recent quarterly distribution was $0.519 per share on June 18, 2026, up from $0.44 in March, with a forward annualized estimate of $2.076 against a share price of $63.60. Over the past year, FDVV returned 21.2%, and over five years, 94%. Net assets stand at $9.2 billion. The tradeoff is concentration: NVIDIA alone can drive more return variance than any three utility positions combined, meaning a semiconductor downturn would impact this fund more than traditional dividend funds.

DGRW: Weighting by Cash Dividends Paid

WisdomTree's DGRW takes a different approach. Instead of sorting by yield, it screens the U.S. large-cap universe for return on equity, return on assets, and expected earnings growth, then weights by cash dividends paid. This methodology, detailed in its July 2026 prospectus filing, results in top holdings of Microsoft, NVIDIA, Apple, and Alphabet because they generate enormous absolute dividend dollars even at sub-1% yields.

DGRW pays monthly, which is unusual for a quality-growth strategy and can be useful for retirees managing cash flow. Distributions vary widely by month, from $0.025 to $0.23, with a trailing 12-month total of $1.23 per share. December distributions tend to be higher due to year-end capital gains passthroughs. The expense ratio is 0.28%, higher than a plain-vanilla dividend index but reflecting the active fundamental weighting.

Over the last year, DGRW returned 17.6% and approximately 270% over ten years, trading recently at $99.83. Its yield on cost is lower than FDVV and materially lower than BALI, making it more suitable for those focused on dividend growth rather than current income.

BALI: Covered Calls for Enhanced Yield

BALI is an actively managed fund by BlackRock's options team. It holds large-cap U.S. equities, including NVIDIA at 7.22%, Apple at 5.78%, Microsoft at 5.67%, Amazon at 3.80%, and Alphabet at 2.86%, and writes call options against the portfolio to harvest premium. The premiums, plus underlying dividends, are distributed monthly.

The yield math differs from the other two funds. As of August 11, 2026, trailing 12-month distributions totaled $2.66 against a share price near $34.87. Monthly payouts have ranged from $0.17 to $0.38, with the most recent distribution at $0.189 on August 3, 2026. Variability is inherent to the strategy: when volatility is high, premiums are rich; when markets are calm, distributions shrink.

A common concern with covered-call funds is capped upside. BALI addresses this by writing options actively rather than mechanically, aiming to preserve some participation in strong rallies. Its one-year total return of 23.4% outpaced FDVV and DGRW, though that includes distributions. The strategy's long-term appeal depends on performance across a full market cycle.

What it means for income investors

These three ETFs illustrate that dividend investing and exposure to high-growth tech are not mutually exclusive. Each fund offers a different trade-off between current income, growth potential, and risk, allowing investors to choose based on their income needs and market outlook.

Reporting based on: 247wallst.com. Figures verified against market data where available.