-
BMO Canadian Dividend ETF (ZDV)
-
iShares S&P/TSX Composite High Dividend Index ETF (XEI)
-
Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY)
-
Horizons Cdn High Dividend Index ETF (HXH)
Q: I am looking for the top 2 Canadian dividend ETFs to hold mostly in registered accounts. I screened for MERs less than about 0.4 and current yields of about 4.5% or more and came up with: ZDV, XEI and VDY. How would you rank these for long-term holdings; best first. XEI is tied for the lowest MER and has the highest yield, with 29% energy, 29% financial and 17% utilities. VDY has the largest AUM at $2B but high financials at 54% and low utilities at 6%. Finally, I would like to invest in HXH in unregistered accounts but I am concerned about the low daily trading an small AUM at $92M. Thank you!!
5i Research Answer:
We would rank these as XEI, ZDV, and VDY based on appropriate diversification. Other than that, we think the selection can be fairly subjective and see no red flags for these ETFs. On HXH, we agree that the volume is very low for a fund this size. If it is a considerable position an investor is looking at, we would look elsewhere in case of problems getting out of the investment.