Best High Dividend ETFs in Canada

WOWA® Simply Know Your Options

High yields are easy to find. The harder question is which income ETFs have actually rewarded investors once price changes are counted. This page tackles that for large Canadian-listed funds: we take the ones with the highest payouts and rank them by their total return over the past ten years, or five where a ten-year record isn’t available.

The result mixes dividend-stock, covered-call and mixed-asset funds, which earn their payouts in different ways. The profiles below explain what each one holds and what to watch for.

The table below shows 10 funds selected under our methodology. A fund must fall within the top 30% of distribution yields among the large funds included in our comparison and have at least five complete years of return history. The current qualifying yield is approximately 2.94% or higher.

We use ten-year returns when available, otherwise adjusted five-year returns. When ranking scores are close, the fund with the higher Sharpe ratio, a measure of return relative to fluctuations, comes first. The table shows actual historical returns, not adjusted ranking scores.

Distribution yield covers the previous 12 months. Annualized total return covers the period shown, including reinvested distributions. Fund expenses are reflected in total return; MER is shown for comparison and is not deducted again.

A ranking across different fund types does not mean those funds serve the same purpose. Read the exposure, strategy and risks before comparing an ETF with the rest of your portfolio. For a broader comparison, see our Best Canadian ETFs guide.

What it holds: Higher-yielding Canadian companies that pass a quality screen.

Tracks an MSCI index of Canadian companies with above-average dividend yields that also pass a quality screen, with any one company capped at 10%.

What to consider: With about 20 holdings it is concentrated, and more than three-quarters sits in financials and energy. A high yield does not guarantee a high total return.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Canadian covered-call ETFs with modest leverage.

Holds about ten Hamilton sector covered-call ETFs and applies direct cash borrowing (~25% leverage) at the top fund level to buy more units. Because a few underlying Hamilton funds also use modest internal leverage, the portfolio carries both direct and layered leverage.

What to consider: Leverage magnifies losses as well as gains, and selling calls limits upside. Its borrowing costs are not included in its MER. Top-level cash borrowing introduces margin interest costs. Option writing caps upside during strong market rallies.

Until July 1, 2022, it aimed to deliver 1.25 times the return of a covered-call ETF index; it has since been actively managed.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Higher-yielding Canadian dividend-paying companies.

Tracks a FTSE index of Canadian companies with higher forecast dividend yields, selected until they make up half of the eligible market's value, reviewed once a year.

What to consider: Selecting for yield puts close to 90% of the fund in financials and energy. A high payout does not guarantee a high total return.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: 30 Canadian dividend-paying companies.

Tracks a Dow Jones index of 30 Canadian companies with steady dividend records, weighted by dividends paid rather than company size, with a 10% cap per company.

What to consider: More than half the fund is in financials, and it holds no technology, health care or real estate. With 30 holdings, it is concentrated.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Global dividend-paying companies with an option overlay.

TD's managers pick dividend-paying companies in developed markets and write covered calls and cash-secured puts on part of the portfolio for extra income. It is measured against MSCI World.

What to consider: About two-thirds of the fund is in the US, and foreign currencies are unhedged. Option writing limits upside in strong markets.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: 70% common shares, 20% preferred shares and 10% bonds; Canadian financial sector.

Built by BlackRock from a model portfolio supplied by Manulife Investment Management. It mixes Canadian financial common shares, preferred shares and bonds, and pays monthly.

What to consider: Despite holding several asset types, it is concentrated in one sector. It can borrow up to 15% of its net assets, although the latest holdings file shows no borrowing.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Higher-yielding Canadian dividend stocks.

Tracks an S&P index of 50 to 75 TSX companies ranked by dividend yield, capping any one stock at 5% and any one sector at 30%.

What to consider: Financials, energy and utilities make up about three-quarters of the fund, so it is sensitive to interest rates and oil prices. A high yield does not guarantee a high total return.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Six Canadian banks with covered calls.

Holds the six large Canadian banks, partly through BMO Equal Weight Banks Index ETF (ZEB), and writes covered call options on at least half the portfolio to generate extra income. It follows no index.

What to consider: Selling calls caps some of the upside in strong bank rallies. With six holdings in one industry, it is highly concentrated, and option trading costs sit outside the MER.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Canadian dividend-paying companies.

Tracks a Nasdaq index of about 45 TSX companies with at least five years of steady or rising dividends, weighted by market value with an 8% cap.

What to consider: Financials, energy and utilities are about 80% of the fund. A high yield does not guarantee a high total return.

Read the provider’s fund details for its investment objective, holdings and distribution information.

What it holds: Canadian high-dividend stocks with covered calls.

BMO screens Canadian dividend payers on yield, dividend growth and payout ratio, then writes covered call options over the holdings for extra income. It follows no index.

What to consider: Selling calls limits upside in strong markets, and the fund leans toward financials and energy. Option trading costs of 0.22% sit on top of the 0.72% MER.

Read the provider’s fund details for its investment objective, holdings and distribution information.

Monthly dividend ETFs appeal to investors who want regular cash flow for household spending. Others pay quarterly or on another schedule chosen by the fund manager. A monthly schedule describes when payments arrive, not how much income the investment earns over a year.

An ETF’s payment schedule can also differ from the schedules of the companies it holds. Check the provider’s current distribution calendar and whether distributions are paid in cash or reinvested. The amount can change even when the frequency stays the same.

Choose the investment exposure and risk you want first, then consider whether the payment schedule suits your needs. Monthly payments do not establish better total returns or stronger support for distributions.

Distribution yield describes the size of payouts relative to the ETF’s value. Total return combines payouts with the gain or loss in the investment’s value. Looking at both helps distinguish a fund that pays generously from one that has also delivered a strong overall result.

For example, if an ETF starts at $100, pays $8 in cash and finishes at $95, an investor who takes the cash has $103 before taxes and trading costs. The payout was 8% of the starting value, but the combined gain was only 3%. Published reinvested total returns also reflect the timing of distributions and reinvestment.

A trailing yield reflects the last 12 months. A forward or annualized distribution yield extrapolates a recent payment. This page uses the trailing measure consistently.

A rising yield can result from a falling unit value, rather than a larger payment. Compare the underlying strategy, historical return and risk instead of selecting on yield alone.

An ETF distribution can include Canadian or foreign dividends, interest, realized capital gains, and return of capital. The mix depends on what the fund holds and how it invests. BlackRock explains these distribution types in its distributions and tax guide. For a taxable account, our Canadian income tax calculator can help estimate tax on dividends, interest and realized capital gains. Use the fund’s reported tax breakdown rather than treating every distribution as a dividend.

Dividend-stock ETFs hold companies that pay dividends. The fund may spread its holdings across sectors, or concentrate in areas such as banks, utilities or energy. Concentration can make the result more sensitive to one part of the economy. Compare these funds with our guide to Canadian dividend stocks.

Covered-call ETFs sell call options over some or all of their holdings to collect option premiums. In exchange, they give up some potential gains if those holdings rise strongly. A larger distribution therefore does not establish a larger total return.

Bond ETFs mainly generate interest income. Preferred-share and mixed-asset ETFs can combine several sources of distributions. These payments are included in our broad income comparison, although they are not all company dividends. Interest-rate sensitivity, credit quality and asset mix can differ substantially from a dividend-stock fund.

For an income investor, an important question is whether past payments were supported by investment returns or accompanied by a reduction in the capital left in the fund. A high distribution on its own cannot answer that question.

Our ranking favours stronger long-term total returns, but it does not directly test whether recent distributions were covered by earnings or preserved the ETF’s net asset value per unit. A fund can have a positive total return while its unit value declines.

To assess that historical support, compare net asset value per unit and cash distributions over the same period, and examine the fund’s financial statements. Return-of-capital tax figures provide context, but they are not a complete measure of economic capital erosion. Market declines can also reduce net asset value, so a decline does not by itself prove that the distribution was excessive.

They are ETFs investors commonly use for substantial investment payouts. Traditional dividend ETFs hold dividend-paying companies. This page also compares other higher-distribution strategies, including covered calls and interest-paying funds, and labels what each fund holds.

Their risk depends on the holdings and strategy. Stock prices can fall, bond funds can lose value when rates rise or borrowers weaken, and leverage adds risk. A large payout or a monthly payment schedule does not make an ETF safe.

They can be useful when regular investment income suits your goals. But cash payments are only part of the result. Compare total return, concentration, costs and tax treatment with other investment approaches, including funds that pay smaller distributions. Our personal finance guide explains how investing fits alongside budgeting, saving and managing debt.

Monthly-paying ETFs exist across dividend-stock, covered-call, bond and mixed-asset strategies. Check the provider’s distribution frequency and payment calendar for the fund you are considering. This ranking is based on yield and long-term returns, not a monthly-only screen.

Yes. Vanguard’s Canadian high-dividend ETF, VDY, makes distributions from its dividend-stock portfolio. Its fund details provide the payment history and current distribution policy. An ETF’s distributions may include more than company dividends, so check the distribution breakdown as well as the amount paid.

A fund may be outside our dataset or comparison universe, below the current top-30% yield threshold, too young for the history requirement, or outside the top ten by our ranking. Its absence does not establish that it is unsuitable or a poor investment.

No. Total return is useful evidence of overall historical performance, but it combines changes in fund value with distributions. Earnings coverage and preservation of net asset value require separate information over matching periods.

You can buy a Canadian-listed ETF through a brokerage account by searching its ticker and placing an order. Confirm the trading currency, fees and bid–ask spread, and read the fund’s disclosure documents. Our guide to buying stocks in Canada explains the brokerage and order process. If you plan to hold the ETF in a TFSA, check your TFSA contribution room before contributing.