Exchange-traded funds focused on dividend stocks can add income and stability to a portfolio, and adding a layer of active management onto the fund can help differentiate performance from the broader market.
To screen for the top-performing actively managed ETFs in this category, we looked for those with the best returns over the last one-, three-, and five-year periods. Three Canadian dividend & income equity ETFs made it through the screen.
- Global X Active Canadian Dividend ETF HAL
- Manulife Smart Dividend ETF CDIV
- RBC Quant Canadian Dividend Leaders ETF RCD
Screening for the Top-Performing Active Canadian Dividend & Income Equity ETFs
These funds must have a stated mandate to invest primarily in income-generating securities and invest at least 70% of their equity holdings in securities domiciled in Canada. In addition, they must invest at least 50% of their non-cash assets in income-generating securities such that the three-year weighted average yield on the equity component of the fund’s portfolio is above the three-year weighted average yield of the S&P/TSX Composite Dividend Index. The fund’s average capitalization must exceed the Canadian and Canadian focused small/mid cap threshold.
Over the past 12 months, the average fund in the Canadian dividend & income equity category returned 29.07%. On an annualized basis, these funds have climbed 18.95% over the past three years and 13.25% over the past five. Meanwhile, the Morningstar Canada Index has risen 33.09% over the past 12 months, 24.21% per year over the past three years, and 15.85% per year over the past five.
We looked at returns from the past one, three, and five years using Morningstar Direct. We screened for Canada-domiciled exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for those periods. We also filtered for ETFs with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded funds with assets under C$100 million. This left three investments.
Global X Active Canadian Dividend ETF
- : BronzeMorningstar Medalist Rating
- : ★★★★★Morningstar Rating
The C$126.1 million fund has gained 46.49% over the past year, while the average fund in its category is up 29.07%. The Global X fund, launched in February 2010, has climbed 22.83% over the past three years and 15.83% over the past five.
Manulife Smart Dividend ETF
- : SilverMorningstar Medalist Rating
- : ★★★★Morningstar Rating
Over the past year, the Manulife fund rose 37.73%, while the average fund in its category rose 29.07%. The fund, launched in November 2020, has climbed 23.97% over the past three years and 15.69% over the past five.
RBC Quant Canadian Dividend Leaders ETF
- : GoldMorningstar Medalist Rating
- : ★★★★★Morningstar Rating
The C$406.8 million fund has climbed 31.64% over the past year, outperforming the average fund in its category, which rose 29.07%. The RBC fund, launched in January 2014, has climbed 23.82% over the past three years and 16.51% over the past five.
