The Best Monthly Dividend ETFs to Buy in Canada for 2024 (2024)

Canadian monthly dividend ETFs invest in stocks with higher yields and use covered calls to increase monthly income. These individual corporations are mature companies that provide modest income to their investors instead of reinvesting profits back into the company. These are usually large blue-chip companies with a long history of dividend payments.

What are the Best Monthly Dividend ETFs in Canada?

Companies that pay dividends are signs of maturity and strength. Dividends can ease the effects of market volatility if they are reinvested. They have better valuation metrics and a higher dividend yield than the broader Canadian market. These companies tend to have proven management, solid balance sheets and strong cash flow.

Which Canadian ETF Pays the Highest Dividend?

Horizons Canadian Oil and Gas Equity Covered Call ETF (ENCC.TO) pays the highest dividend yield of the best-performing monthly dividend ETFs in Canada.

What are the Best Monthly Dividend ETFs in Canada?

1. TLF.TO: Brompton Tech Leaders Income ETF
2. ENCC.TO: Horizons Canadian Oil and Gas Equity Covered Call ETF
3. DXC.TO: Dynamic Active Canadian Dividend ETF
4. LIFE-B.TO: Evolve Global Healthcare Enhanced Yield Fund
5. USCC.TO: Horizons US Large Cap Equity Covered Call ETF
6. XDIV.TO: iShares Core MSCI Canadian Quality Dividend Index ETF
7. VDY.TO: Vanguard FTSE Canadian High Dividend Yield Index ETF
9. ZWH.TO: BMO US High Dividend Covered Call ETF
10. ZWA.TO: BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETF

Here is a table comparing similarmonthly dividend ETFsinCanadaas ofJanuary 31, 2024.

Manager	ETF	Inception	MER	AUM	P/E	Yield	Distributions	1Y	3Y	5Y	10Y	15Y
	XDIV	2017-06-07	0.11%	$982,107,690	12.65	4.42%	Monthly	6.53%	13.83%	10.12%	N/A	N/A
	XEI	2011-04-12	0.22%	$1,532,688,904	10.34	5.08%	Monthly	-0.63%	12.68%	9.24%	6.49%	N/A
	ZWA	2011-10-20	0.72%	$207,150,000	N/A	6.21%	Monthly	10.95%	8.43%	8.35%	8.69%	N/A
	ZWH	2015-02-06	0.72%	$1,010,010,000	N/A	5.71%	Monthly	7.61%	10.41%	8.76%	N/A	N/A
	TLF	2011-05-20	0.96%	$113,000,000	40.75	5.31%	Monthly	43.64%	12.57%	20.34%	15.52%	N/A
	DXC	2017-01-20	0.84%	$190,270,000	N/A	2.44%	Monthly	5.84%	12.24%	11.63%	N/A	N/A
	LIFE.B	2017-10-25	0.68%	$276,262,000	22.93	8.07%	Monthly	11.88%	10.04%	11.59%	N/A	N/A
	ENCC	2011-04-11	0.81%	$244,633,508	7.24	14.87%	Monthly	5.36%	40.26%	14.25%	-2.21%	N/A
	USCC	2014-01-15	0.81%	$123,962,789	N/A	11.17%	Monthly	16.44%	8.26%	11.34%	8.87%	N/A
	VDY	2012-11-02	0.22%	$2,080,000,000	10.42	4.55%	Monthly	0.81%	13.25%	10.07%	8.02%	N/A
Manager	ETF	Inception	MER	AUM	P/E	Yield	Distributions	1Y	3Y	5Y	10Y	15Y

10. BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETF

BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETF has been designed to provide exposure to a portfolio of Dow Jones Industrial Average companies, while earning call option premiums. The Fund invests in securities of the Dow Jones Industrial Average, and dynamically writes covered call options. The call options are written out of the money and selected based on analyzing the option’s implied volatility. The option premium provides limited downside protection. The underlying portfolio is rebalanced to maintain better representation of the broad market and of American industry and options are rolled forward upon expiry. In addition, as ZWA may hold other underlying ETFs, the management fees charged are reduced by the management fees paid on the underlying ETFs, thereby not duplicating the management fees.

9. BMO US High Dividend Covered Call ETF

BMO US High Dividend Covered Call ETF has been designed to provide exposure to a dividend focused portfolio, while earning call option premiums. The underlying portfolio is yield-weighted and broadly diversified across sectors. The Fund utilizes a rules-based methodology that considers dividend growth rate, yield, payout ratio and liquidity. The Fund also dynamically writes covered call options. The call options are written out of the money and selected based on analyzing the option’s implied volatility. The option premium provides limited downside protection. The underlying portfolio is rebalanced to maintain broad sector diversification and options are rolled forward upon expiry. In addition, ZWH may hold other underlying ETFs, the management fees charged are reduced by management fees paid on the underlying ETFs, thereby avoiding duplication of the management fees.

The ETF seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P/TSX Composite High Dividend Index (the “Index”), net of expenses. Under normal market conditions, the ETF will primarily invest in Canadian equity securities. The Index is comprised of 50 to 75 stocks selected from the S&P/TSX Composite Index. Index constituents are ranked and selected based on their indicated dividend and are capped at 5% weight, while each sector is capped at 30% weight.

VDY.TO: Vanguard FTSE Canadian High Dividend Yield Index ETF

The fund seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad Canadian equity index that measures the investment return of common stocks of Canadian companies that are characterized by high dividend yield. Currently, this Vanguard ETF seeks to track the FTSE Canada High Dividend Yield Index (or any successor thereto). It invests primarily in common stocks of Canadian companies that pay dividends.

6. iShares Core MSCI Canadian Quality Dividend Index ETF

The ETF seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the MSCI Canada High Dividend Yield 10% Security Capped Index (the “Index”), net of expenses. Under normal market conditions, the ETF will primarily invest in securities of one or more exchange-traded funds managed by BlackRock or an affiliate and/or Canadian equity securities. The Index targets companies from the MSCI Canada Index (excluding REITs) with high dividend income and quality characteristics and includes companies that have higher than average dividend yields that are expected to be both sustainable and persistent. Securities are also screened based on certain “quality” factors such as return on equity, earnings variability, debt to equity, and on recent 12-month price performance.

5. Horizons US Large Cap Equity Covered Call ETF

Horizons US Cap Equity Covered Call ETF (USCC) is a covered call ETF that gives investors exposure to a portfolio of the largest and most liquid U.S.-listed equity market stocks and then uses a covered call strategy to generate additional income on the portfolio. Many of the U.S. large-cap equities companies offer some level of income through dividend yield. A covered call strategy is a way to potentially further increase that income stream substantially through the use of covered calls that can generate an income premium.

4. Evolve Global Healthcare Enhanced Yield Fund

LIFE seeks to replicate the performance of the Solactive Global Healthcare 20 Index Canadian Dollar Hedged, while mitigating downside risk by writing covered call options on up to 33% of the portfolio securities. The level of covered call option writing may vary based on market volatility and other factors.

3. Dynamic Active Canadian Dividend ETF

• Utilizes a bottom-up approach and fundamental analysis to assess growth and value potential
• Targets companies that are attractively valued, have high margins and market share, and are run by quality management teams
• Has the flexibility to access businesses located outside Canada

2. Horizons Canadian Oil and Gas Equity Covered Call ETF

ENCC seeks to provide, to the extent possible and net of expenses: (a) exposure to the performance of an index of Canadian companies that are involved in the crude oil and natural gas industry (currently, theSolactive Equal Weight Canada Oil & Gas Index); and (b) monthly distributions of dividend and call option income. To mitigate downside risk and generate income, ENCC will employ a dynamic covered call option writing program.

1. Brompton Tech Leaders Income ETF

This ETF provides high monthly distributions and the opportunity for capital gains through an investment in an actively managed portfolio of large cap global Technology companies selected by Brompton, complemented by a proprietary covered call program.

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