Canadian investors seeking income via dividend yields in equity markets may be overwhelmed with auctions. In Canada alone, a wide range of companies offering meaningful yields is available for every investor type, each offering an independent risk/reward profile and unique catalysts and difficulties to be assessed.
For those investors with perhaps too much domestic exposure, or those simply looking for a high-quality basket approach to income investing, I have an exchange traded fund (ETF) for you.
The BMO International Dividend ETF (TSX:ZDI) is a great fund for those wanting to increase portfolio diversification and yield simultaneously. This ETF holds a portfolio of some of the highest quality dividend paying stocks for around the world, allowing investors access to such diversification at a very low management expense ratio (MER).
Exposure to stocks outside of one's domicile is necessary to avoid concentration risks and allows for more robust income generation overtime.
This ETF earns income in a wide variety of currencies and is not currency hedged, providing Canadian investors not bullish on the strength of the Canadian dollar with upside.
As the Canadian dollar weekends, investors received more Canadian dollars via dividends from foreign nations, so long as dividend payouts remain stable and/or continue to grow. I prefer unhedged exposure to most securities at lower regions of the risk spectrum and will encourage investors to therefore consider this ETF as a great long term holding in this low interest rate environment.
Invest wisely, my friends.
