Canadian Dividend ETFs

Canadian Income ETFs

First Published Date : June 19, 2011 ADawnJournal.com

Who does not like to sit back, relax, and collect dividends on a regular basis without worrying too much about picking individual stocks or giving hefty fees (MER) to mutual funds? ETFS allow you to do just that, and for income hungry investors the choices to pick income or dividend EFTs are getting noticeably wider in Canada. Today, I am going to discuss my top eight ETFs I like for generating income. ETFs trade on stock exchanges just like stocks and you can buy them through your discount brokerage account or through a licensed financial advisor. For more information on ETFs, please visit A Dawn Journal ETF Section and TMX Money ETF Section.

BMO Covered Call Canadian Banks ETF (TSX: ZWB) – This ETF invests in Canadian banks and writes out of the money covered call options, thus earning premiums on call options. As of this writing, it has a staggering portfolio yield of 9.56 per cent and MER is 0.65 per cent. Before considering this ETF, do understand how the covered call option strategy works and the risks associated with it.

BMO monthly Income ETF (TSX: ZMI) – This ETF, actually, is an ETF of ETFs. It maintains a 50/50 balance of equities and fixed income, investing 50/50 in high yielding equity and fixed income ETFs. Portfolio yield is 5.35 per cent and MER is 0.55 per cent.

Claymore 1 – 5 YR Laddered Corporate Bond ETF (TSX: CBO) – This ETF tracks the DEX 1-5 Yr Laddered Corporate Bond Index. It tries to main a continuous maturity laddered portfolio of securities maturing in a proportional, annual sequential pattern. Portfolio yield is 4.63 per cent and MER is 0.27 per cent.

Claymore S&P/TSX Preferred Share ETF (TSX: CPD) – Simply enough, this ETF tries to match the performance of the S&P/TSX Preferred Share index. Portfolio yield is 4.80 per cent and MER is 0.48 per cent.

Claymore 1 – 5 YR Laddered Government Bond ETF (TSX: CBO) – Similar concept like CBO mentioned above, but this ETF tracks the DEX 1-5 Year Laddered Government Bond index instead of the DEX 1-5 Yr Laddered Corporate Bond Index. Portfolio yield is 4.52 per cent and MER is 0.16 per cent. Notice the MER; it’s really a bargain.

Claymore Canadian Financial Monthly Income ETF (TSX: FIE) – Name says it all. This ETF tries to provide monthly cash distribution of $0.04 per units. Portfolio yield is 6.70 per cent and MER is 1.24 per cent. MER is quiet high.

iShares Diversified Monthly Income (TSX: XTR) – Similar concept like ZMI mentioned above, XTR is an ETF of ETFs and provides consistent monthly cash distribution. Portfolio yield is 5.78 per cent and MER is 0.55 per cent.

iShares S&P/TSX Capped REIT Index ET (TSX: XRE) – This ETF tries to match the performance of the S&P/TSX Capped REIT Index. Portfolio yield is 4.88 per cent and MER is 0.59 per cent.

Disclosure – This article is for information purposes only and No information is intended as investment, tax, accounting or legal advice, or as an offer to sell or buy or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security, ETF, or fund. The author assumes no liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon. You bear responsibility for your own investment research and decisions, and should seek the advice of a qualified financial professional before making any investment decision. I own some of the ETFs mentioned here.