7 Best Fidelity Dividend Funds [Passive Income Picks]

The best Fidelity dividend funds have a lot to offer besides dividend income. They’re generally strong performers, they charge modest fees compared to their peers, and they boast the Fidelity advantage: no investment minimum, which means you can start investing for as little as a dollar.

Investment funds in general are a helpful way for investors to collect dividend income. When you allocate a large portion of your assets to any single dividend stock, you run not only the risk of downside in that stock weighing down your entire portfolio, but a dividend cut or suspension would also clip a considerable portion of the income you generate. Dividend funds, however, spread that risk across dozens if not hundreds of stock, protecting you on both price and cash-generation fronts.

And Fidelity has several funds that fit this bill.

Read on, and I’ll introduce you to some of the best Fidelity dividend funds you can buy. These funds pay more than the broader market while charging below-average management expenses and letting you buy in for virtually nothing.

Editor’s Note: The tabular data shown in this article is up-to-date as of Oct. 1, 2026.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Why Invest in Dividend Stocks Via Mutual Funds?

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Dividend mutual funds enable us to invest in groups of stocks that pay distributions with a single purchase.

The best dividend mutual funds do a little more.

Dividend stocks are pretty common, but they’re not created equally. Sure, you can find some stocks with a good, sustainable yield and growing payouts. But some only pay nominal dividends that are just a penny or two per share, with no prospect for dividend growth anytime soon. Others might offer generous but unsustainable dividend payouts that might be eliminated altogether in the future.

That’s why mutual funds are a good alternative to individual dividend stocks. These vehicles spread your money around, rather than force you to rely on one company’s specific strengths and weaknesses. And finding the best stocks capable of consistently paying dividends and enjoying significant future dividend growth can be a daunting task, even for seasoned investors. 

So instead, why not try to gain exposure to dividend-paying stocks via a single, diversified holding that’s tasked with finding great companies for you?

That’s where Fidelity dividend funds come in.

Why Fidelity?

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Fidelity is a leader in mutual funds (and exchange-traded funds, for that matter) and has been a force in the industry since the launch of its Fidelity Puritan Fund (FPURX) back in 1947.

Today, this premier mutual fund company has nearly $20 trillion in assets under administration thanks in large part to the success of its talented fund managers. Most notably, that includes Peter Lynch, the longtime manager of the Fidelity Magellan Fund (FMAGX) who averaged an incredible 29.2% per year between 1977 and 1990. But Fidelity can also thank other successful managers, such as Joel Tillinghast and Will Danoff.

However, while Fidelity first built its name on actively managed funds, over the past three decades, the firm has built out its low-cost and even no-cost index funds as part of the movement to reduce expense ratios and transaction costs for individual investors.

The end result? A fund lineup that can serve just about every need, and that’s typically competitive on price.

Related: The 11 Best Fidelity Funds to Buy Now

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The Best Fidelity Dividend Funds: My Methodology

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Fidelity’s best dividend mutual funds include a variety of strategies and flavors—in other words, no single reader is going to need each fund on this list.

But there should be something for virtually everyone. And every fund on this list will share at least a few attractive traits.

I started my search the same way I begin most of my reviews: by booting up Morningstar Investor and running a quality screen I customize for each article. In this case, I looked for only Fidelity mutual funds that have earned a Morningstar Medalist rating of Gold, Silver, or Bronze.

Unlike Morningstar’s Star ratings, which are based upon past performance, Morningstar Medalist ratings are a forward-looking analytical view of a fund. Per Morningstar:

“For actively managed funds, the top three ratings of Gold, Silver, and Bronze all indicate that our analysts expect the rated investment vehicle to produce positive alpha relative to its Morningstar Category index over the long term, meaning a period of at least five years. For passive strategies, the same ratings indicate that we expect the fund to deliver alpha relative to its Morningstar Category index that is above the lesser of the category median or zero over the long term.”

As I’ve written in other WealthUpdate articles, a Medalist rating doesn’t mean Morningstar is necessarily bullish on the underlying asset class or categorization. It’s simply an expression of confidence in the fund compared to its peers.

Fidelity actually has dozens of Gold-rated funds, but several of them are specific share classes that are only available to certain subsets of investors—those enrolled in Fidelity Wealth Services, for instance, or those enrolled in eligible employer-sponsored retirement plans. So I’ve further narrowed the list to only Investor-class funds. Importantly, these funds typically offer no investment minimums, meaning you can get started for as little as one dollar.

Past that, all funds here charge annual expenses that are at least lower than the Morningstar category average, and they also don’t levy sales loads or other charges that would further hamper performance.

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1. Fidelity Growth & Income Portfolio

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• Style: U.S. large-cap blend
• Management: Active
• Assets under management: $14.4 billion
• Dividend yield: 1.3%
• Expense ratio: 0.53%, or $5.30 per year for every $1,000 invested
• Morningstar Medalist Rating: Silver

Some people like to cannonball into the pool, while some prefer to stick a toe instead—just to make sure frigid death doesn’t await us. 

I’m the latter, so let’s start with the Fidelity Growth & Income Portfolio (FGRIX).

A so-called “blend” fund, like the S&P 500, will own both growth stocks and value stocks. FGRIX manager Matt Fruhan is tasked with something similar but not quite the same: build a portfolio of growth companies and dividend-paying equities. 

While value-priced companies often pay cash distributions, growth companies can fill that role, too. That’s plenty evident in this 189-stock, U.S.-heavy portfolio, which holds ascendant companies such as Nvidia (NVDA) and Broadcom (AVGO) that also pay dividends.

But value is absolutely part of the secret sauce here, too.

“Fruhan starts from the conviction that the market routinely misprices companies’ earnings power over a multiyear horizon,” Morningstar Principal Robby Greengold says. “He gravitates toward downtrodden cyclicals whose prospects look unduly gloomy and toward secular growers whose magnitude or duration of growth is underappreciated.”

The aforementioned NVDA and AVGO, as well as other tech dividends in the portfolio, deliver mild yields; more generous value-priced equities such as Wells Fargo (WFC) and Exxon Mobil (XOM) help pick up the slack.

Yes, the 1.3% yield is only 30 basis points higher than the S&P 500. (A basis point is one one-hundredth of a percentage point.) But we’re still earning more income than the broader market while also owning numerous issues positioned for rapid expansion. That makes it one of the best Fidelity dividend funds to buy if you want just a little more income without significantly reshaping your portfolio.

Want to learn more about FGRIX? Check out the Fidelity provider site.

Related: Dividend Kings: The Full List of American Dividend Royalty

2. Fidelity Equity-Income Fund

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• Style: Large-cap dividend stock
• Management: Active
• Assets under management: $11.5 billion
• Dividend yield: 1.5%
• Expense ratio: 0.52%, or $5.20 per year for every $1,000 invested
• Morningstar Medalist Rating: Gold

Fidelity Equity-Income (FEQIX) isn’t exactly one of Fidelity’s most scintillating products. This income-focused, large-cap value fund will never be a topic of water-cooler conversation, and in fact, it will typically lag a little when the market is screaming higher.

But if you find yourself in peril, you’ll love having it in your corner.

FEQIX invests in 117 large-cap stocks, mostly U.S.-based blue chips like Exxon Mobil (XOM), JPMorgan Chase (JPM), and Dividend Aristocrat Johnson & Johnson (JNJ) that pay out better-than-average dividends. You get some international exposure (about 15% of assets currently), with the same focus on big, dividend-paying firms such as Linde (LIN) and AstraZeneca (AZN). That helps this Fidelity dividend fund throw off a still-modest-but-we’re-getting-there 1.5%.

Technically, manager Ramona Persaud is allowed to invest in debt securities and even trade covered calls to manage the fund’s assets, but right now, the fund’s assets are virtually all in equities, with about 2% in cash.

This kind of portfolio construction lends itself to less upside in bull markets but better protection during bear markets and other downturns. It outperformed the market slightly during the COVID crash, as well as the late 2018 and March 2026 downturns, and by a much wider margin during the 2022 bear market and through 2025’s spring turbulence.

“Persaud consistently strives for the best possible approach grounded in details and data,” Morningstar Senior Analyst Todd Trubey says. “Her training as an engineer anchored her emphasis on structure and stability, which informs the weight she puts on traversing difficult periods successfully and the precision she uses to generate downside protection. But unlike many investors who stress quantitative rigor, she invokes the art of investing often and consistently demonstrates humility when the market shifts.”

Want to learn more about FEQIX? Check out the Fidelity provider site.

Related: The Best Retirement Plans [Workplace + Individual]

3. Fidelity Select Pharmaceuticals Portfolio

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• Style: Industry (Pharmaceuticals)
• Management: Active
• Assets under management: $1.6 billion
• Dividend yield: 2.5%
• Expense ratio: 0.67%, or $6.70 per year for every $1,000 invested
• Morningstar Medalist Rating: Gold

Certain areas of the market are more prone to dividend payments than others. The next few equity funds will dive into some of those areas.

First up is the Fidelity Select Pharmaceuticals Portfolio (FPHAX), which isn’t a pure single-industry fund, but it’s close enough to count. A little more than 80% of assets are invested in pharmaceutical companies, and virtually all of the rest is used to own biotechnology stocks. (What’s the difference? Pharma companies use chemical processes to create their treatments, while biotech companies use living organisms.)

Manager Karim Suwwan de Felipe has hand-picked a portfolio of 59 stocks that leans toward large caps but still has adequate exposure to the kinds of small-cap companies that have the potential to explode higher (or plummet) based on FDA approvals or denials, or that might be attractive as M&A targets to bigger firms. The largest weights are dedicated to multinationals such as GSK (GSK) and Merck (MRK), which is how FPHAX delivers a well-above-average yield of 2.5%.

One potential red flag to note is a massive overweight to Eli Lilly (LLY), which right now accounts for just under a quarter of assets. It’s certainly a potential boon if it recreates the outstanding 370% return it has generated over the past five years, but a liability should Wall Street cool on the weight-loss-drug manufacturer.

FPHAX is one of the best Fidelity dividend funds you can own. Sure, it’s more expensive than your typical indexed sector or industry product, but it has largely been worth it. Suwwan de Felipe has been on board since 2017; we can’t yet use 10-year performance comparisons to measure his performance, but he has overseen a five-year total return that bests 93% of its category peers.

Want to learn more about FPHAX? Check out the Fidelity provider site.

Related: The Best Healthcare ETFs: 5 Wholesome Picks

4. Fidelity Telecom and Utilities Fund

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• Style: Thematic (Utilities and telecommunications)
• Management: Active
• Assets under management: $1.2 billion
• Dividend yield: 2.2%
• Expense ratio: 0.68%, or $6.80 per year for every $1,000 invested
• Morningstar Medalist Rating: Bronze

When the going gets tough, the tough typically find their way into the utility sector.

OK, I’m terrible at remembering how sayings go. But the fact remains that utility companies such as electric, gas, and water companies are among the market’s most defensive stocks. They provide essential needs that people generally won’t stop spending on unless they’ve cut everything else to the bone. They operate almost like monopolies, with little to no competition. And because there’s usually not much growth in this line of business, utilities often pay generous dividends to entice people to hold their shares.

Fidelity Telecom and Utilities Fund (FIUIX) takes this concept a step further.

Managers Alex Boyajian and Pranay Kirpalani have built a 48-stock portfolio of utility and certain communication services stocks—namely telecoms. Why? Because in today’s day and age, it’s easy to argue that internet and phone service are mighty close to traditional utilities in their necessity. 

As a result, FIUIX holds not just utilities like NextEra Energy (NEE) and American Electric Power (AEP), but also telecom companies like Verizon Communications (VZ) and AT&T (T) … which, by the way, traditionally pay pretty hefty dividends, too. Right now, this Fidelity dividend fund offers up more than twice the broader market’s yield.

This has generally been a winning combination across the fund’s history. FIUIX has beaten its category average and been within the top 20% of its peers (if not better) over the trailing five-, 10-, and 15-year periods.

Want to learn more about FIUIX? Check out the Fidelity provider site.

Related: 3 Best Utility ETFs You Can Buy Right Now

5. Fidelity Real Estate Investment Portfolio

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• Style: Sector (Real estate)
• Management: Active
• Assets under management: $1.2 billion
• Dividend yield: 2.2%
• Expense ratio: 0.68%, or $6.80 per year for every $1,000 invested
• Morningstar Medalist Rating: Silver

Real estate can deliver both upside and regular income, which is why it’s a preferred alternative investment. But most of us don’t have the liquid cash it takes to go out and buy, say, a hospital, mall, or apartment complex.

The most accessible way we have to invest in real estate is the real estate investment trust (REIT): a specifically structured business with a special tax status that allows it to avoid corporate taxation so long as it distributes at least 90% of their net profits as dividends. Because of this tax incentive, REITs tend to be one of the highest-yielding sectors and a perennial favorite among income investors.

Fortunately, many REITs are publicly traded, and thus can be bought and sold just like normal corporations. And if you’d like to own a bunch of them at once, you can buy a fund like the Fidelity Real Estate Investment Portfolio (FRESX).

Manager Steve Buller has built a collection of 44 U.S.-based REITs, including logistics real estate leader Prologis, datacenter specialist Equinix, mall giant Simon Property Group (SPG), and apartment landlord UDR (UDR).

I’ll be honest: Among the best Fidelity dividend funds, FRESX has perhaps the most underwhelming yield—yes, it’s higher than several funds on this list, but it’s on the thin side for a basket of REITs. Still, it’s a solid fund that pays more than twice as much as the market.

One note on taxes: REITs are very tax-inefficient, as a large percentage of the total return comes from taxable dividends. What’s more, REIT dividends are generally not classified as “qualified dividends.” Qualified dividends are taxed at the long-term capital gains rate (0%, 15% or 20% depending on your tax bracket). Non-qualified dividends are taxed as ordinary income, like bond interest, and can face rates as high as 37%, depending on your bracket. Thus, it makes more sense to hold REITs and REIT funds in a tax-advantaged plan like an individual retirement account (IRA) rather than a taxable brokerage account.

Want to learn more about FRESX? Check out the Fidelity provider site.

Related: 5 Best REIT ETFs for Real Estate Income

6. Fidelity International Index Fund

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• Style: International large-cap stock
• Management: Index
• Assets under management: $85.9 billion
• Dividend yield: 2.8%
• Expense ratio: 0.035%, or 35¢ per year for every $1,000 invested
• Morningstar Medalist Rating: Gold

U.S. markets have long been among the most productive in the world, and if you believe in the American economy’s ability to keep growing, that should remain the case—and thus, most experts would tell you to own primarily U.S. stock and bond funds.

But those same experts would tell you that it’s worth having at least some international exposure, and you can do that mighty inexpensively through the Fidelity International Index Fund (FSPSX).

FSPSX tracks an index of mostly large companies from developed markets such as Japan, the U.K., France, and Australia. It’s a wide portfolio of more than 680 companies that, like many international funds, is heavy in financials (26%), industrials (19%), and technology (11%). Top holdings right now include Dutch semiconductor supply company ASML Holding (ASML), U.K. financial HSBC Holdings (HSBC), and Swiss food giant Nestlé (NSRGY).

A common theme among developed-market equity products? Much higher dividends than comparable U.S. funds. Right now, these blue chips are paying out a collective yield of almost 3%, which clobbers the S&P 500 and even many U.S. “high-yield” dividend funds.

Fidelity International Index Fund earns its Gold Medalist rating, as well as a spot among my best Fidelity dividend funds, largely on the strength of its dirt-cheap 0.035% expenses ratio. It’s hard to find a cheaper way to own international stocks; Fidelity does offer the Fidelity ZERO International Index Fund (FZILX) for an annual fee of literally nothing. But like all Fidelity ZERO Funds, you can only purchase FZILX through a Fidelity account.

Want to learn more about FSPSX? Check out the Fidelity provider site.

7. Fidelity Low-Priced Stock Fund

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• Style: Global small-/mid-cap stock
• Management: Active
• Assets under management: $23.1 billion
• Dividend yield: 1.8%
• Expense ratio: 0.59%, or $5.90 per year for every $1,000 invested
• Morningstar Medalist Rating: Silver

I’ll be clear: The goal of Fidelity Low-Priced Stock Fund (FLPSX) has nothing to do with dividends. But it’s a mighty interesting fund with a niche objective that just so happens to pay a better yield than the market, and that’s reason enough to give this product its flowers.

FLPSX, launched in December 1989, was originally guided by none other than Fidelity legend Joel Tillinghast, who sought to find stocks with hidden value to unlock—regardless of whether they fall under the traditional “growth” or “value” umbrellas. But he targeted companies that also had low nominal prices—first at $15 or below, then eventually $25, then $35.

He finally retired in 2023, and the fund is now steered by managers Morgen Dresser Peck and Sam Chamovitz. The strategy has widened to include either $35-or-below stocks or companies with an earnings yield equal to or below the Russell 2000 Index median.)

While large caps can have low nominal stock prices, they’re more common among small- and mid-cap stocks, which make up a respective 50% and 35% of this 553-holding portfolio. Risk is well spread out, with no stock accounting for more than 2% and only three—Wells Fargo, TotalEnergies (TTE), and PG&E (PCG)—accounting for more than 1% apiece. And a sizable 35% allocation to foreign companies helps fuel a nearly 2% yield.

“The strategy hasn’t strayed far from its roots,” Morningstar’s Greengold says about this Silver-rated fund. “It remains a global outlier for its investment predilections, and in the hands of seasoned stock-pickers with strong judgment and clear-eyed pursuit of long-term value.”

It’s certainly one of the most unorthodox Fidelity dividend funds you’ll come across. But category-beating performance over all meaningful time periods also makes it one of the best.

Want to learn more about FLPSX? Check out the Fidelity provider site.

Learn More About These and Other Funds With Morningstar Investor

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If you’re buying a fund you plan on holding for years (if not forever), you want to know you’re making the right selection. And Morningstar Investor can help you do that.

Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

With Morningstar Investor, you’ll enjoy a wealth of features, including Morningstar Portfolio X-Ray®, stock and fund watchlists, news and commentary, screeners, and more. And you can try it before you buy it. Right now, Morningstar Investor is offering a free seven-day trial and a discount on your first year’s subscription when you use our exclusive link.

 

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