For income-focused investors prioritizing sustainable business practices, the Invesco S&P/TSX Canadian Dividend Aristocrats ESG Index ETF (TSX:ICAE) stands out as an exceptionally strong candidate today.
This fund offers a compelling mix of reliable income and responsible investing. To be included in the ETF, companies must have a proven track record of increasing their ordinary cash dividends in four of the past five years, with no dividend cuts. Additionally, these companies are screened to meet specific environmental, social, and governance (ESG) criteria.
The strategy has paid off remarkably well for its shareholders. Year-to-date, the ETF is up 16%, showcasing that you don't have to choose between strong returns and ethical investing.
The fund is heavily focused on resilient and defensive sectors, providing a robust foundation for consistent payouts. Among its large top holdings are renowned Canadian heavyweights that reliably generate cash, including Royal Bank of Canada, Enbridge, and Canadian National Railway. These rock-solid dividend stocks provide the underlying stability the ETF relies on to weather periods of unpredictable market performance.
For investors aiming to build out a tax-free savings account (TFSA) or long-term portfolio, this specific fund is particularly appealing due to its reasonable expense structure, as its management expense ratio is modest at 0.23%. And currently, the ETF yields about 2.7%.
A significant advantage for retail investors is that this fund distributes its payments on a monthly basis. This frequent cash flow makes it a fantastic option for generating recurring income, allowing you to easily reinvest or cover regular expenses while staying insulated against broader market volatility.
