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Highlights
- World economies are still facing pandemic-induced economic challenges, which is also exposing stock markets to fluctuations.
- Amid the rise of the many COVID-19 variants this year, the TSX benchmark posted a year-to-date gain of about 22 per cent.
- To diversify and protect their investment portfolios, many Canadian investors look to invest in exchange-traded funds (ETFs).
World economies are still facing pandemic-induced economic challenges, which is also exposing stock markets to fluctuations. Amid the rise of the many COVID-19 variants this year, the TSX benchmark posted a year-to-date gain of about 22 per cent.
To diversify and protect their investment portfolios, many Canadian investors look to invest in exchange-traded funds (ETFs).
Let us explore some of the top TSX-listed ETFs of 2021.
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1. iShares S&P/TSX Capped Energy Index ETF (TSX:XEG)
iShares S&P/TSX Capped Energy Index ETF, which aims to mimic the TSX energy index, is set to deliver a quarterly dividend of C$ 0.058 per unit on January 6, 2022.
XEG, which held a return on equity of 15.51 per cent, is one of Canada's top actively traded exchange-traded funds.
Units of XEG closed at C$ 10.6 apiece on December 29, bringing its year-to-date (YTD) return to nearly 78 per cent.
Also read: 5 best industrial stocks of 2021 in Canada
2. BMO Equal Weight Banks Index ETF (TSX:ZEB)
BMO Equal Weight Banks Index ETF focuses on matching the equal-weighted and diversified Canada-based bank benchmark (after expenses).
The ETF will dole out a hiked quarterly dividend of C$ 0.12 per unit on January 5, 2022, up from the last payout of C$ 0.10.
ZEB units closed at C$ 39.1 apiece on December 29 and zoomed by roughly 35 per cent YTD.
3. BMO Low Vitality Canadian Equity ETF (TSX:ZLB)
BMO Low Vitality Canadian Equity ETF aims to track and follow the Canadian equity portfolio comprising securities that are less sensitive to market fluctuations and have long-term capital growth prospects.
The ETF is set to distribute a dividend of C$ 0.25 on January 5, 2022.
ZLB, which has a price-to-earnings (P/E) ratio of 15.5, closed at C$ 40.6 apiece on December 29. Its units jumped by nearly 20 per cent in 2021.
4. iShares S&P/TSX 60 Index ETF (TSX:XIU)
iShares S&P/TSX 60 Index ETF mainly invest in Canada-based equities to imitate the performance of S&P/TSX 60 Index after expenses.
XIU, which recorded a return on equity (ROE) of 17.94 per cent, closed at C$ 32.7 apiece on December 29. Its units expanded by approximately 25 per cent YTD.
5. BMO Canadian High Dividend Covered Call ETF (TSX:ZWC)
BMO Canadian High Dividend Covered Call ETF aims to replicate the performance of a portfolio comprising Canada-based dividend-paying firms to provide for the dividend income and capital growth. In addition, it minimizes the downside risk by leveraging covered call options.
ZWC is expected to pay a monthly dividend of C$ 0.1 per unit on January 5, 2022.
Units of ZWC closed at C$ 18.9 apiece on December 29 and surged by over 17 per cent YTD.
Bottom line
ETFs generally have a broader scope and cover a larger part of a sector than any single stock. However, investors should carefully invest in these funds as every investment involves some risks.
Also read: ETF vs Index Fund: Which is a better investment option?
