This Simple ETF Could Replace Your Dividend Portfolio

Many dividend investors spend countless hours researching hundreds of different stocks, hoping to find the right combination to put in their portfolio. 

There’s a much easier way. The BMO Canada Dividends ETF (TSX:ZDV) offers instant diversification, good long-term performance, and perhaps most importantly, a solid dividend yield.

The ETF has some $800 million in assets and trades approximately 150,000 shares each day. It has traded since November 2011. There are 45.6 million shares outstanding.

The current annualized distribution yield is 4.4%, based on the most recent dividend. Google Finance lists the trailing yield at 4.1%. Either way, it’s still an attractive payout. It pays investors on a monthly basis, with the most recent dividend coming to 6.3 cents per share. It also paid out a nine-cent-per-share distribution at the end of 2016.


Top holdings include Capital Power Corp (3.5% of assets), IGM Financial (3.1%), Veresen Inc. (3.1%) , Gibson Energy (2.9%) and National Bank of Canada (2.75%). There are 51 total holdings.

There are 35.7% of assets in the financial sector, 22.6% in energy, and 14.6% in utilities. This is to be expected; all three sectors are known dividend payers, although energy is a bit of a surprise. Most of the fund’s energy stocks are energy service companies, rather than producers.


The BMO Dividend ETF has a management expense ratio of 0.39%, which is quite reasonable.

This ETF is a solid choice for folks who want income but aren’t inclined to pick their own stocks.