Best Global Dividend ETFs 2021 in Canada, full analysis and comparison!

In this post, we will be going over the Best Global Dividend ETFs in Canada. Only, Global ETFs that invest primarily outside of North America were considered.

Methodology: we started by selecting the most popular ETFs based on Asset under management. Then, we compared these ETFs based on the dividend yield, performance over a 3 years period and volatility. For each ETF, we provide the funds’ objective, holdings and sector/geographic allocation.

Global Dividend ETFs are a great way to get exposure to international markets. However, in comparison with US or Canadian Dividend ETFs, Global Dividend ETFs are much less popular in Canada. Overall, the performance has been the main reason behind this lack of interest. We were able to identify only 4 ETFs that have more than 100 Million dollar in assets and who are truly global (invest in international market excluding US and Canada). As you would see below, BMO dominates the list with their offering especially with their European high dividend covered call ETFs.

Comparison MER or Volatility

Refer to the 2 tables below (The yields and performance data were updated as of March 27th). Note: Past performance does not mean necessarily that the fund will do well in the future).

NameAUM *MER
ZWP – BMO Europe High Div Cov Call ETF8860.71%
ZWE – BMO Europe High Div CC CAD Hedge ETF7500.67%
ZDI – BMO International Dividend ETF4520.44%
RID – RBC Quant EAFE Dividend Leaders ETF1480.54
Source: barchart.com and Issuers website / AUM is asset under management

– ZDI – BMO International Dividend ETF has the lowest MER among our list at 0.44%! While, ZWP – BMO Europe High Div Cov Call ETF has the highest MER at 071%.

Comparison Yield and performance

SymbolDiv Yield
%
YTD
%
1 yr
%
3 yr
%
Beta*
 ZWP7.082.017.89n/an-a
 ZWE7.330.98-1.611.300.98
 ZDI4.652.736.420.411.17
RID3.271.2413.031.960.97
Source: Yahoo Finance April 1st, 2021 / Beta is a measure of risk, the higher the Beta the higher is the volatility

– ZWP – BMO Europe High Div Cov Call ETF and ZWE – BMO Europe High Div CC CAD Hedge ETF are the highest dividends paying ETFs in our list. They both pay a little bit over 7% in dividend which is great. But, investors should know that a portion of these payouts are dividends, the other portion are options’ premiums. In fact, because both of these ETFs write covered calls dynamically, they generate additional income through option premiums in certain conditions. This strategy overall has a negative impact on the performance of these ETFs. When you are writing covered calls, you are in essence giving up on the upside potential of the stocks you own.

– RID – RBC Quant EAFE Dividend Leaders ETF has the best performance among the selected ETFs in our list.

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ZWP – BMO Europe High Div Cov Call ETF

The BMO Europe High Dividend Covered Call ETF (ZWP) has been designed to provide exposure to a dividend focused portfolio. These dividend paying companies are selected based on:

  • dividend growth rate,
  • yield,
  • payout ratio and liquidity.

What’s unique about this ETF is that it uses covered calls to protect against downside risk. This being said, the covered call strategy provides limited downside protection. Also, when you write a covered call, you give up some of the stock’s potential gains. These ETFs will tend to have a higher yield and a lower performance.

Holdings

Weight (%)Name
4.88%VOLKSWAGEN AG PFD
3.97%ALLIANZ SE
3.94%SIEMENS AG
3.91%UNILEVER PLC
3.89%NESTLE SA
3.84%BASF SE
3.84%TOTAL SE
3.66%ZURICH INSURANCE GROUP AG
3.62%ENEL SPA
3.46%SANOFI

Geographic allocation

CountriesWeight
Switzerland23.64%
Germany22.91%
United Kingdom19.48%
France17.10%
Other (multiple countries)16.87%

Sector allocation

TypeFund
Information Technology6.30
Industrials12.26
Consumer Discretionary10.13
Health Care16.82
Financials14.63
Materials10.56
Communication8.08
Energy4.32
Utilities3.58
Issuers’ website as of Feb 26th 2021

ZWE – BMO Europe High Div CC CAD Hedge ETF

The BMO Europe High Dividend Covered Call ETF (ZWP) has been designed to provide exposure to a dividend focused portfolio. This ETF is similar to ZWP – BMO Europe High Div Cov Call ETF. The only additional feature ZWE has is the fact that it’s Canadian hedged to reduce exchange risk.

Holdings

Weight (%)NameBloomberg Ticker
99.83%BMO EUROPE HIGH DIVIDEND COVERED CALL ETFZWP
0.17%CASH
Issuers’ website

For geographic allocation and Sector allocation, please see ZWP – BMO Europe High Div Cov Call ETF.

ZDI – BMO International Dividend ETF

The BMO International Dividend ETF (ZDI) has been designed to provide exposure to a yield weighted portfolio of dividend equities domiciled in international developed markets (outside North America).

Criteria used to select dividend paying stocks:

  • three-year dividend growth rate
  • yield
  • payout ratio

Holdings

Weight (%)Name
2.57%ALLIANZ SE
2.50%SANOFI
2.50%NESTLE SA
2.48%ENEL SPA
2.48%UNILEVER PLC
2.47%TOYOTA MOTOR CORP
2.46%ROCHE HOLDING AG
2.46%TOTAL SE
2.44%GLAXOSMITHKLINE PLC
2.42%RIO TINTO PLC
Issuers’ website

Geographic allocation

CountriesWeight
Japan17.58%
Germany16.15%
United Kingdom13.31%
France12.18%
Switzerland11.90%
Other (multiple countries)28.88%

Sector allocation

TypeWeight (%)
Information Technology2.99
Industrials11.78
Consumer Discretionary7.26
Consumer staples11.98
Health Care14.56
Financials15.53
Materials13.15
Communication8.80
Energy3.06
Utilities8.31
Issuers’ website as of Feb 26th 2021

RID – RBC Quant EAFE Dividend Leaders ETF

RID seeks to provide unitholders with exposure to the performance of a diversified portfolio of high-quality dividend-paying equity securities in markets in Europe, Australasia and the Far East (EAFE) that will provide regular income and that have the potential for long-term capital growth.

Holdings

HoldingsAssets
ROCHE HOLDING AG3.2%
KONE OYJ2.7%
KUEHNE + NAGEL INTERNATIONAL AG2.6%
ALLIANZ SE2.1%
JAPAN TOBACCO INC2.0%
OBAYASHI CORP1.9%
ASML HOLDING NV1.6%
DAIMLER AG1.5%
NINTENDO CO LTD1.4%
INDUSTRIA DE DISENO TEXTIL SA1.4%

Geographic allocation

CountriesWeight
Japan27.1%
Germany10.2%
United Kingdom12.4%
Australia7.5%
France6.4%
Spain5.7%
Other (multiple countries)30.7%
as of March 31st

Sector allocation

TypeWeight (%)
Information Technology6.9
Industrials14.70
Consumer Discretionary12.3
Consumer staples10.9
Health Care10.4
Financials18.30
Materials7.0
Communication8.7
Energy2.5
Utilities5.1
Issuers’ website as of March 31st

Disclaimer

The data on this website is for your information only. It does not constitute investment advice, or advice on tax or legal matters. Any information provided on this website does not constitute investment advice or investment recommendation nor does it constitute an offer to buy or sell or a solicitation of an offer to buy or sell shares or units in any of the investment funds or other financial instruments described on this website. Should you have any doubts about the meaning of the information provided herein, please contact your financial advisor or any other independent professional advisor.