Many dividend investors spend countless hours researching hundreds of different stocks, hoping to find the right combination to put in their portfolio.
There’s a much easier way. The BMO Canada Dividends ETF (TSX:ZDV) offers instant diversification, good long-term performance, and perhaps most importantly, a solid dividend yield.
The ETF has some $800 million in assets and trades approximately 150,000 shares each day. It has traded since November 2011. There are 45.6 million shares outstanding.
The current annualized distribution yield is 4.4%, based on the most recent dividend. Google Finance lists the trailing yield at 4.1%. Either way, it’s still an attractive payout. It pays investors on a monthly basis, with the most recent dividend coming to 6.3 cents per share. It also paid out a nine-cent-per-share distribution at the end of 2016.
Top holdings include Capital Power Corp (3.5% of assets), IGM Financial (3.1%), Veresen Inc. (3.1%) , Gibson Energy (2.9%) and National Bank of Canada (2.75%). There are 51 total holdings.
There are 35.7% of assets in the financial sector, 22.6% in energy, and 14.6% in utilities. This is to be expected; all three sectors are known dividend payers, although energy is a bit of a surprise. Most of the fund’s energy stocks are energy service companies, rather than producers.
The BMO Dividend ETF has a management expense ratio of 0.39%, which is quite reasonable.
This ETF is a solid choice for folks who want income but aren’t inclined to pick their own stocks.
