Many investors insist on dividends, content in knowing if the price of the stock doesn’t cooperate, at least they’ll get paid to own it.
Many feel it’s dangerous to pick their own individual stocks, so they migrate to many of the dividend ETFs out there. One of the choices for these investors is the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY).
Like many of Vanguard’s other offerings in Canada, the high yield ETF hasn’t been out for that long, debuting in October, 2012. It has done relatively well since inception, growing an initial $10,000 investment into something worth more than $13,300 today.
The ETF has 70 different holdings. The top holdings are dominated by Canada’s largest banks. The top four holdings of Royal Bank, TD Bank, Bank of Nova Scotia, and Bank of Montreal collectively make up about 40% of the ETF’s assets. Other top holdings include Enbridge, TransCanada, CIBC, and Manulife.
The ETF has a management fee of just 0.2%, which is lower than many other dividend ETFs, but higher than some that track indexes like the TSX Composite and TSX 60. Overall, for what it offers, it’s a very competitive management fee. It had $239 million in assets as of July 31.
This fund has a trailing yield of 3.6%, which is pretty attractive compared to other more traditional income sources. It is a little lower than some other comparable dividend ETFs, however.
All in all, this dividend ETF is a pretty solid choice for dividend investors.
