The Globe and Mail 2025 ETF Buyer’s Guide, Vol. 5 – Canadian dividend ETFs #NewsETFs

Canada’s dividend disconnect is that investors love dividend stocks, but not exchange-traded funds that invest in these shares.

The asset level in Canadian dividend ETFs is far from insignificant. But there’s a massive gap between these ETFs and other equity fund categories. Let the fifth installment of the 2025 Globe and Mail ETF Buyer’s Guide be your guide to what’s available in ETF-land for dividend investors.

The top reason to consider a dividend ETF is diversification. In recent years, we’ve seen repeated examples of blue-chip dividend stocks underperforming. Examples include Enbridge (ENB-T), BCE Inc. (BCE-T) and, for a while, the big banks. The dividend funds in the guide hold diversified portfolios of as many as 40 to 90 stocks.

For income investors, most dividend ETFs offer a higher yield than broad Canadian equity ETFs. For this year, the average yield is 3.9 per cent. Dividend ETFs also pay income monthly, which is helpful for retirees.

Negatives for dividend ETFs include higher fees than you’ll find on most traditional Canadian equity ETFs. The ETF business competes hard on fees, but dividend funds are still too expensive. In the guide, you will find both low- and higher-cost choices.

The 2025 edition of the ETF Buyer’s Guide wraps up in two weeks by looking at asset allocation funds, which offer a well-diversified portfolio in a single ETF. The guide has already covered Canadian, U.S. and international equity funds, as well as bond funds.

Here’s a discussion of terms used in this edition of the ETF Buyer’s Guide:

Assets: Shown to give you a sense of how interested other investors are in a fund.

Management expense ratio (MER): The main cost of owning an ETF on a continuing basis; published returns are shown on an after-fee basis.

Trading expense ratio (TER): The cost of trading commissions racked up by the managers of an ETF as they make adjustments to the portfolio of investments; add the TER to the MER for a full picture of a fund’s cost.

Yield: Based on the recent pattern of monthly payouts and the latest share price; may reflect payments of dividends and return of capital; check the fund profiles on ETF issuer websites to find out what kinds of income have been contained in distributions in recent years.

50-day trading volume: Average number of shares traded daily over the previous 50 days; it’s easier to buy and sell at competitive prices if an ETF is heavily traded.

Top sector weightings: This is an area where dividend ETFs differ widely. Many have big weightings in energy, a more volatile sector than other dividend-rich sectors like utilities, pipelines and even financials.

Returns: ETF companies show total returns or share-price change plus dividends or distributions.

Download the source excel here.

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