With the uncertainty surrounding the Fed's change of course and rising odds of a recession, it's important to have a defensive but profitable tool in hand right now. In this case, it is prudent to focus on investments that have the potential to outperform in both excessively bearish and excessively bullish market conditions. The Fidelity High Dividend ETF (FDVV) is one possible investment in a volatile environment. The ETF outperformed the S&P 500 during the 2021 bull market and was roughly flat during the 2022 bear market and thus far in 2023 YTD.

Fidelity High Dividend ETF seeks to provide investment returns that corresponds to the performance of the so-called Fidelity High Dividend Index. Normally investing at least 80% of assets in securities included in the Fidelity High Dividend Index and in depository receipts representing securities included in the index. The Fidelity High Dividend Index is designed to reflect the performance of stocks of large and mid-cap dividend-paying companies that are expected to continue to pay and grow their dividends.

The main reason FDVV is able to perform well in both bull and bear market conditions is its well-diversified portfolio, which is heavily weighted towards large-cap dividend stocks. Furthermore, the combination of growth and value stocks allows FDVV to outperform even in tough market conditions like the current one. The technology sector is the best performing sector so far in 2023, accounting for around 20% of the total portfolio weight.

Quite oddly, at a glance, financial sector, which has been a price performance laggard thus far, has the second-highest weight in FDVV's composition. It's also worth noting that FDVV invests in large-cap financial stocks, with no exposure to struggling regional banks, such as JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC).