What’s XDV ETF?
The iShares Canadian Select Dividend Index ETF provides long-term capital growth by investing in 30 high yielding Canadian companies in the Dow Jones Canada Total Market Index.
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What is Dow Jones Canada Select Dividend Index?
The index universe is defined as all dividend-paying companies listed on the Toronto Stock Exchange, excluding income trusts.
The dow Jones Canada Select Dividend Index is rebalanced annually in March. It has 29 constituents of the index. Below, we will detail the methodology used to select the ‘best dividend stocks’.
Methodology
Selected stocks should meet the requirements below:
-Be part of the Index Universe.
-Only stocks that paid dividends in each of the previous five years are selected.
-Enough trading volume
-A five-year average dividend coverage ratio of greater than or equal to 125%. The formula used: Earning per Share / Annual Dividend per Share
The approved stocks are then re-screened by ranking them in descending order by using the indicated annual dividend yield (not including any special dividends). The maximum number of constituents is 30.
Constituent Weightings: Constituent weightings are assigned annually based on IAD. The weight of any individual company is restricted to 10% within the index. Such restrictions are implemented on a quarterly basis
XDV vs VDY and XEI
In this section, we will compare VDY with Both XDV – Ishares Canadian Select Div Index and XEI – Ishares S&P TSX Comp High Div Index. See tables below:
Table 1: AUM and MER
| ETF | AUM* | MER* |
| XDV – Ishares Canadian Select Div Index | 1,734 | 0.55 |
| XEI – Ishares S&P TSX Comp High Div Index | 1,088 | 0.22 |
| VDY – Vanguard FTSE CDN High Div Yld Index | 1,137 | 0.21 |
Looking at the management fees, VDY is attractive. The MER is only 0.21% in comparison with XDV, which stands at 0.55%.
Table 2: Performance comparison and analysis
| ETF | Div yld % | 1yr | 3yrs % | 5yrs % |
| XDV | 3.75 | 7.51 | 14.26 | 9.54 |
| XEI | 3.74 | 16.30 | 14.49 | 9.78 |
| VDY | 3.44 | 17.10 | 16.14 | 11.02 |
VDY has the best performance, both in short and long term, in comparison with XDV and XEI. Recent performance of XDV (6 months) is lower than both VDY and XEI.
In terms of allocation, the banking sector dominates both VDY and XEI holdings. It’s essential to keep this in mind when constructing your portfolio. In essence, you want your overall holdings to be diversified across various sectors.
XDV holds 30 high dividend-paying stocks in its holdings while VDY 39. In terms of volatility, XDV and VDY have the same volatility (Beta: 0.9).
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Table 3: Dividend schedule and Beta
| ETF | Monthly Div | Beta* |
| XDV | Yes | 0.9 |
| XEI | Yes | 1.1 |
| VDY | Yes | 0.9 |
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Ishares Canadian Select Dividend Index: Morningstar rating
The Morningstar rating for VDY is 4 stars:
Ishares Canadian Select Dividend Index: dividend history
XDV pays dividends on a monthly basis. Please refer the last column of the table below for the amount of dividend distribution.
| Ex-Date | Payable Date | Cash Amount | Total Distribution | Reinvested |
|---|---|---|---|---|
| Feb 22 | Feb 28 | 0.10300 | 0.10300 | 0.00000 |
| Jan 25 | Jan 31 | 0.10300 | 0.10300 | 0.00000 |
| Dec 30, 2021 | Jan 6 | 0.10500 | 0.55893 | 0.45393 |
XDV Stock holdings
| Name | Weight % |
|---|---|
| CANADIAN IMPERIAL BANK OF COMMERCE | 9,11 |
| BANK OF MONTREAL | 7,00 |
| ROYAL BANK OF CANADA | 6,33 |
| CANADIAN TIRE LTD CLASS A | 6,17 |
| BANK OF NOVA SCOTIA | 5,06 |
| TC ENERGY CORP | 4,95 |
| LABRADOR IRON ORE ROYALTY CORP | 4,94 |
| BCE INC | 4,92 |
| TORONTO DOMINION | 4,77 |
| NATIONAL BANK OF CANADA | 3,94 |
XDV Sectors allocation
au 17 mars 2022
% de la valeur marchande
| Type | Fonds |
|---|---|
| Finance | 55,66 |
| COMMUNICATION | 11,82 |
| Services publics | 11,12 |
| Énergie | 6,75 |
| Consommation discrétionnaire | 6,17 |
| Matières | 5,77 |
| Valeurs industrielles | 2,32 |
| Liquidités et/ou produits dérivés | 0,39 |