Avoid Being Deceived by This Dividend-Related ETF Scam: ZDV:CA ETF

Underperforming Canadian Dividend ETF, ZDV:CA, falls short compared to peers and benchmark, while also maintaining a high expense ratio of 0.39% for a basic portfolio.

, and Administrator

2025 May 4 . 9:33 PM

2 min read

Let's Break Down the BMO Canadian Dividend ETF: ZDV:CA

The BMO Canadian Dividend ETF (TSX:ZDV:CA) is more than just a ticker symbol - it's a low-volatility powerhouse delivering consistent income for investors. With a whopping NAV of $1.1 billion CAD, this exchange-traded fund (ETF) focuses on high-dividend-yielding Canadian equities, aiming for both stability and capital appreciation potential.

Automatic Dividend Machines

The primary objective of ZDV:CA is simple - generate income via dividends while providing exposure to high-quality Canadian dividend-paying companies. Key sectors on its radar? Financial institutions and energy giants, which account for an impressive 58% of its holdings.

Sector Spotlight

Financials (38%) and Energy (20%) drive its investments.
Despite the concentration, ZDV:CA boasts a broad exposure across Canadian equities, ensuring a balanced approach.

Risk and Return

ZDV:CA is a top-performers chart staple, delivering a solid ~24-25% cumulative return over three years - a feat comparable to that of its competitors. Despite the healthy returns, this ETF boasts low-volatility, making it an appealing choice for those seeking to balance yield with reduced market risk.

MER and Yield

The management expense ratio (MER) comes in at 0.39%, which is slightly higher than some alternatives like XEI (0.22%), but still competitive within the income ETF realm. As for the dividend, expect a tasty ~3.8-4% yield, paid out monthly, keeping those bank accounts brimming.

Competitor Comparison

Alternatives to ZDV:CA include the mighty XEI and the complex ZWC, just to name a few. Each offers varying sector emphases, MERs, and complexities that deserve a thoughtful comparison for optimal yield-risk balance.

Caution: Potential Volatility

Despite its impressive track record, ZDV:CA underperformed the broader markets in 2024 by around 2% due to sector-specific risks. This fact underscores the importance of thorough research before making a move.

In conclusion, the BMO Canadian Dividend ETF (TSX:ZDV:CA) is an appealing choice for income-focused investors eager to capitalize on high-yield Canadian equities. However, understanding its concentration, MER, and sector emphases is crucial before jumping aboard this dividend train. Happy investing!

The BMO Canadian Dividend ETF (TSX:ZDV:CA) is a low-volatility powerhouse that focuses on high-dividend-yielding Canadian equities, offering consistent income for investors in the finance and investing sector.
In the ZDV:CA ETF, financial institutions and energy giants make up an impressive 58% of its holdings, with strategically balanced investments in other Canadian equities.
When comparing ZDV:CA to competitors such as XEI and ZWC, one should consider the varying sector emphases, MERs, and complexities to achieve the optimal yield-risk balance in the stock-market.
Despite its solid performance, ZDV:CA underperformed the broader markets in 2024 due to sector-specific risks, highlighting the necessity of thorough research before making investment decisions.