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Summary
- Some TSX-listed dividend-paying exchange-traded funds (ETFs) have defied downside risk this year.
- These ETFs have also delivered double-digit growth, along with healthy dividend yields.
- Canadian investors could subscribe to these ETFs for long-term investment appreciation.
Exchange-traded funds (ETFs) are the long-term capital investment options that put investors’ money in diversified high dividend-paying companies. There are some special ETFs that also pay monthly dividends and allow investors to enter and exit these funds every month.
With stable cash distributions, ETFs can also offer healthy periodic equity yields to investors. In case of high volatility, the following Toronto Stock Exchange-listed ETFs could be the best bet to avoid any downtrend this year.
1. Dividend Growth Split Corp. (TSX:DGS)
This mutual fund corporation invests its client money in large-cap stocks that deliver interesting dividends. It distributes a monthly dividend of C$ 0.10 apiece and holds an attractive dividend yield of 16.46 per cent, as per TMX.
Units of Dividend Growth Split Corp. have swelled over 114 per cent to C$ 7.29 apiece this year. The fund recorded its 52-week high of C$ 7.48 per unit on June 28. Its one-year return has soared by 165 per cent.
2. BMO Canadian High Dividend Covered Call ETF (TSX:ZWC)
The Canadian Bank’s ETF aims to deliver long-term price performance and high dividends by investing in dividend-paying TSX-listed companies. It has a market cap of above C$ 1 billion and a monthly dividend of C$ 0.10.
Its dividend yield stands at 7.17 per cent.
The fund has beaten the downside risk this year by using the covered call option. Presently trading at C$ 18.25 apiece, it has yielded nearly 13 per cent this year.
It has gained over 25 per cent in one year and surpassed the TSX 300 Composite Index, which has dropped three per cent relatively.
Source: Pixabay.com
3. BMO Canadian Dividend ETF (TSX:ZDV)
The Bank of Montreal (TSX:BMO) fund provides its subscribers with a monthly dividend of C$ 0.065 apiece, with a dividend yield of over four per cent at the moment. It currently has a market cap of C$ 690 million.
The ETF has grown its clients’ portfolios by 37 per cent in the last one year by investing in yield-weighted dividend-paying shares on the TSX. The unit has risen more than 16 per cent year-to-date (YTD), with a return on equity of 12.56 per cent.
4. iShares S&P/TSX Composite High Dividend Index ETF (TSX:XEI)
iShares’ ETF offers long-term growth to its investors by tracking the S&P/TSX Composite High Dividend Index performance and investing in equity securities.
This ETF delivers C$ 0.076 apiece in monthly dividends.
The high dividend fund is trading at C$ 24 apiece at the moment, with a market cap of C$ 1.1 billion. It jumped to a one-year high of C$ 24.43 apiece on June 15, 2021.
It had a strong equity growth in the first half of 2021, with a return of 23 per cent YTD.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
