Dividend stock exchange-traded funds can provide a portfolio with investment growth and income, and they can cushion against downdrafts in the market. To screen for the top-performing ETFs in this category, we looked for those with the best returns over the last one-, three-, and five-year periods.
Seven Canadian dividend and income equity ETFs made it through the screen:
- Global X Active Canadian Dividend ETF HAL
- Global X Canadian High Dividend Index Corporate Class ETF HXH
- Invesco Canadian Dividend Index ETF PDC
- iShares Core MSCI Canadian Quality Dividend Index ETF XDIV
- iShares S&P/TSX Composite High Dividend Index ETF XEI
- Manulife Smart Dividend ETF CDIV
- RBC Quant Canadian Dividend Leaders ETF RCD
Canadian Dividend and Income Equity Fund Performance
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.
Over the past 12 months, the average fund in this category has returned 29.4%. On an annualized basis, these funds have climbed 19.22% over the past three years and 12.97% over the past five. Meanwhile, the Morningstar Canada Index has risen 35.01% over the past 12 months, 24.83% per year over the past three years, and 15.61% per year over the past five.
We looked at returns from the past one, three, and five years using data in 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 Morningstar Medalist Ratings of Bronze, Silver, or Gold. We excluded ETFs with assets under C$100 million. This left seven investments.
Global X Active Canadian Dividend ETF
- : BronzeMorningstar Medalist Rating
- : ★★★★★Morningstar Rating
This C$126.4 million fund has gained 43.11% over the past 12 months, while the average fund in its category is up 29.40%. The Global X fund, launched in February 2010, has climbed 21.94% over the past three years and 15.07% over the past five.
Global X Canadian High Dividend Index Corporate Class ETF
- : GoldMorningstar Medalist Rating
- : ★★★★Morningstar Rating
This C$242.5 million fund has gained 41.95% over the past 12 months, while the average fund in its category is up 29.40%. The Global X fund, launched in April 2016, has climbed 22.45% over the past three years and 16.47% over the past five.
Invesco Canadian Dividend Index ETF
- : SilverMorningstar Medalist Rating
- : ★★★★Morningstar Rating
This C$1.1 billion fund has climbed 43.87% over the past 12 months, outperforming the average fund in its category, which rose 29.40%. The Invesco fund, launched in June 2011, has climbed 23.59% over the past three years and 14.96% over the past five.
iShares Core MSCI Canadian Quality Dividend Index ETF
- : GoldMorningstar Medalist Rating
- : ★★★★★Morningstar Rating
This C$5.5 billion fund has climbed 42.53% over the past 12 months, outperforming the average fund in its category, which rose 29.40%. The BlackRock fund, launched in June 2017, has climbed 26.01% over the past three years and 18.59% over the past five.
iShares S&P/TSX Composite High Dividend Index ETF
- : GoldMorningstar Medalist Rating
- : ★★★★Morningstar Rating
Over the past 12 months, this BlackRock fund rose 43.64%, while the average fund in its category rose 29.40%. The fund, launched in April 2011, has climbed 22.99% over the past three years and 15.86% over the past five.
Manulife Smart Dividend ETF
- : SilverMorningstar Medalist Rating
- : ★★★★Morningstar Rating
This C$1.6 billion fund has gained 38.33% over the past 12 months, while the average fund in its category is up 29.40%. The Manulife fund, launched in November 2020, has climbed 24.01% over the past three years and 15.41% over the past five.
RBC Quant Canadian Dividend Leaders ETF
- : GoldMorningstar Medalist Rating
- : ★★★★★Morningstar Rating
This C$404.9 million fund has climbed 33.46% over the past 12 months, outperforming the average fund in its category, which rose 29.40%. The RBC fund, launched in January 2014, has climbed 24.59% over the past three years and 16.34% over the past five.
