Dividends - Canada, ETFs
Canadian (TSX) Dividend ETFs
Which Canadian Dividend ETF should I add to my portfolio?
Here are the three biggest Dividend ETFs in Canada.
| Canadian Dividend ETF Name | Symbol | MER | Yield |
|---|---|---|---|
| BMO Canadian Dividend ETF | ZDV | 0.35 % | 5.20 % |
| iShares Dow Jones Canada Select Dividend Index Fund | XDV | 0.55 % | 3.85 % |
| iShares S&P/TSX Canadian Dividend Aristocrats Index Fund | CDZ | 0.67 % | 3.29 % |
The BMO Canadian Dividend ETF (ZDV) looks pretty good, with a low cost MER of just 0.35%.
Let’s investigate further, by breaking down the holdings of these ETFs, by sector weighting.
| Sector | ZDV (MER 0.35%) | XDV (MER 0.55%) | CDZ (MER 0.67%) |
|---|---|---|---|
| Financials | 33.1% | 51.3% | 24.1% |
| Energy | 20.5% | 15.2% | 18.0% |
| Consumer Discretionary | 16.5% | 4.8% | 20.9% |
| Utilities | 15.7% | 6.5% | 10.6% |
| Industrials | 2.9% | 6.5% | 10.5% |
| Telecommunication Services | 6.6% | 15.3% | 5.5% |
| Other Sectors | 4.3% | 0.0% | 10.5% |
Looking at this table, the iShares Dow Jones Canada Select Dividend Index Fund (XDV) looks a bit too heavy in both Financials and Telecommunications (versus a world sector breakdown of 24 % and 5 %, respectively).
The BMO Canadian Dividend ETF (ZDV) appears to be more in line with the true weighting of the overall Canadian market.
Although, the weighting looks ok, the MER price of 0.67%, rules out the iShares S&P/TSX Canadian Dividend Aristocrats Index Fund (CDZ)
Conclusion
In my opinion, the best Canadian Dividend ETF is the BMO Canadian Dividend ETF (ZDV)
Individual Stock Holdings – Comparison
In this final table, I have further broken down the sector weightings down to their individual company holdings. It’s interesting to see which companies have been included/excluded in each ETF.
