The Schwab U.S. Dividend Equity ETF (SCHD) is one of the most popular dividend ETFs in the world — loved for its high yield, strong dividend growth, and quality stock selection.
But for Canadian investors, buying SCHD directly isn’t always ideal due to currency conversion, U.S. withholding taxes, and account limitations (especially outside RRSPs).
So, what’s the best Canadian equivalent to SCHD?
Let’s break it down.
🏦 What Is SCHD?
Ticker: SCHD
Provider: Charles Schwab
MER: ~0.06%
Dividend yield: Around 3.5–4.0% (paid quarterly)
Holdings: 100 quality U.S. dividend stocks screened for consistency, profitability, and dividend sustainability.
Top holdings include:
PepsiCo, Verizon, Cisco, Home Depot, Pfizer, Coca-Cola, and Texas Instruments.
The ETF focuses on high-quality companies with 10+ years of dividend payments, low debt, and strong free cash flow. That’s why SCHD has built a reputation for being one of the most reliable dividend growth ETFs on the market.
🇨🇦 Why Canadians Look for an SCHD Equivalent
While SCHD trades on the NYSE, Canadian investors face two main challenges:
- Currency exchange fees: Most Canadian brokers charge 1.5–2.0% to convert CAD to USD.
- U.S. withholding tax: Dividends paid by U.S. ETFs are subject to a 15% tax — unless held inside an RRSP.
To avoid those costs, many Canadians prefer Canadian-listed ETFs that replicate SCHD’s style — high yield, strong dividend growth, and exposure to large-cap companies.
🧭 The Closest Canadian Equivalents to SCHD
| ETF | Focus | MER | Yield (2025) | Key Features |
|---|---|---|---|---|
| VDY.TO | High-dividend Canadian equities | 0.22% | ~4.5% | Pure dividend focus; holds Canadian banks, telecoms, and pipelines. |
| XDV.TO | Canadian Dividend Index | 0.30% | ~4.7% | Follows Dow Jones Canada Select Dividend Index — similar “quality” approach to SCHD. |
| ZDV.TO | High Dividend Yield | 0.39% | ~5.0% | Broader mix of dividend payers; rebalanced semi-annually. |
| XDIV.TO | Low Volatility Dividend | 0.10% | ~4.3% | Focuses on stable, lower-volatility stocks with solid yields. |
| ZWC.TO | Covered Call Dividend | 0.72% | ~7.0% (monthly) | For higher income seekers — adds covered-call overlay. |
⚖️ Which One Is Most Like SCHD?
There’s no perfect one-for-one match, but here’s how they stack up conceptually:
–VDY is closest in spirit — it holds high-quality, large-cap dividend growers (mainly banks, telecoms, and energy).
–XDV uses an index methodology that resembles SCHD’s focus on consistent dividend payers with strong fundamentals.
–XDIV is ideal for investors who want low volatility and similar income levels, though it’s 100% Canadian equities.
If you want a Canadian version of SCHD’s high-quality dividend focus, VDY and XDV are your best pure equity choices.
If you’re after monthly income and yield over growth, ZWC offers a higher cash flow alternative using a covered-call strategy — more like JEPI than SCHD, but still relevant for income investors.
🌎 What If You Want the Same U.S. Exposure?
If you specifically want exposure to U.S. dividend stocks (like SCHD) without buying SCHD directly, two good options are:
| ETF | Provider | Description |
|---|---|---|
| ZDY.TO | BMO | U.S. Dividend ETF (CAD-hedged/unhedged versions). Holds U.S. dividend payers, paid in CAD. |
| VGG.TO | Vanguard Canada | U.S. Dividend Appreciation Index (CAD version of VIG). Focuses on companies growing dividends 10+ years. |
These two ETFs hold U.S. dividend stocks, but trade in CAD on the TSX — a true middle ground between SCHD and domestic dividend ETFs.
💰 Tax Tip: Hold SCHD in an RRSP, Not TFSA
If you decide to buy SCHD directly on the NYSE, it’s best held in an RRSP.
That’s the only Canadian account type exempt from the 15% U.S. withholding tax on dividends under the Canada–U.S. tax treaty.
In a TFSA or non-registered account, you’ll lose 15% of the dividend income automatically — even before you file taxes.
🧩 Final Thoughts: Building “Your Own SCHD” in Canada
Here’s a simple way to mimic SCHD’s style with Canadian ETFs:
| Component | ETF | Allocation | Purpose |
|---|---|---|---|
| U.S. Dividend Exposure | ZDY or VGG | 50% | U.S. large-cap dividend stocks (CAD-denominated) |
| Canadian Dividend Core | VDY or XDV | 40% | Blue-chip Canadian income |
| Monthly Income Booster | ZWC | 10% | Covered-call overlay for extra cash flow |
This mix gives you a diversified, high-yield portfolio across both U.S. and Canadian dividend payers — the closest possible Canadian version of SCHD, while keeping simplicity and tax efficiency.
📊 Key Takeaways
SCHD = high-quality, large-cap U.S. dividend ETF.
VDY, XDV, XDIV = best Canadian-listed substitutes.
ZDY or VGG = Canadian-listed ETFs that hold U.S. dividend stocks (true equivalents).
ZWC = higher monthly income option if you prefer cash flow over growth.
For direct SCHD exposure, hold it in an RRSP only to avoid U.S. withholding tax.
💬 Bottom Line
If you love SCHD’s strategy but invest primarily in CAD,
👉 VDY or XDV are your best Canadian equivalents.
For a cross-border twist, ZDY or VGG give you SCHD-style exposure without leaving the TSX.
You’ll earn strong dividends, reduce currency hassle, and keep your portfolio simple — exactly what long-term investors want.