1.BMO Canadian High Dividend Covered Call ETF
ZWC.TO (TSX)
The BMO Canadian High Dividend Covered Call ETF (ZWC) targets a diversified portfolio of Canadian dividend stocks, complemented by a covered-call strategy. With a robust dividend yield of 5.54%, it aims to deliver strong passive income, making it an attractive option for investors seeking reliable returns. Additionally, ZWC has demonstrated impressive performance, showcasing a 1-year return of 21.83% and a 5-year return of 29.47%, positioning it well for income-focused investors in 2026.
Pros:
- High dividend yield
- Diversified portfolio of Canadian dividend stocks
Cons:
- Market volatility risk
- Dependence on call option premiums
2.Vanguard FTSE Canadian High Dividend Yield Index ETF
VDY.TO (TSX)
The Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY) is a compelling choice for investors looking for reliable income, focusing on high-yield Canadian stocks with a low management expense ratio of 0.22%. Boasting an attractive dividend yield of 3.24%, the ETF has delivered impressive returns of 35.62% over the past year and 85.57% over the past five years. This top-rated fund emphasizes financial stability and consistent payouts, making it ideal for those seeking to enhance their income portfolio.
Pros:
- Tracks high-yield Canadian stocks
- Low management expense ratio
Cons:
- Market risk associated with individual stocks
- Dependence on market conditions
3.BMO Covered Call Canadian Banks ETF
ZWB.TO (TSX)
The BMO Covered Call Canadian Banks ETF (ZWB) is an attractive option for investors seeking steady income through covered-call exposure to major Canadian banks. Delivering a strong dividend yield of 5.15% and impressive one-year returns of 33.15%, ZWB focuses on generating predictable income while maintaining a stable position in the financial sector. With a promising long-term forecast and consistent performance, this ETF is ideal for dividend investors looking for reliable growth in a solid market.
Pros:
- Focus on major Canadian banks
- Predictable income through covered calls
Cons:
- Exposure to financial sector risks
- Dependence on call option premiums
4.iShares Core MSCI Canadian Quality Dividend Index ETF
XDIV.TO (TSX)
The iShares Core MSCI Canadian Quality Dividend Index ETF (XDIV) stands out with a robust dividend yield of 3.67% and a low management expense ratio of 0.11%. With 21 carefully selected holdings, this ETF emphasizes exposure to financially healthy companies, making it an ideal choice for long-term investors seeking reliable income and steady growth, evidenced by its impressive 1-year return of 25.55% and a remarkable 5-year return of 83.64%.
Pros:
- High yield among top picks
- Broadly diversified portfolio
Cons:
- Market risk associated with individual stocks
- Dependence on market conditions
5.iShares S&P/TSX Canadian Dividend Aristocrats Index ETF
CDZ.TO (TSX)
The iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ) emphasizes investing in dividend-growth stocks from financially healthy companies, offering a 3.27% dividend yield. With a solid 1-year return of 19.62% and a remarkable 5-year return of 49.93%, CDZ stands out as a compelling option for investors seeking consistent income and growth potential. Its monthly distributions further enhance its appeal, making it a noteworthy addition to any income-focused portfolio.
Pros:
- Tracks companies increasing dividends
- Strong historical performance
Cons:
- Lower yield compared to some other funds
- Market risk associated with individual stocks
Final Words
As you consider the best dividend ETFs this March 2026 in Canada, remember to evaluate each option based on your investment goals and risk tolerance. Take time to compare these ETFs and conduct your own research to make an informed decision that aligns with your financial strategy.
Frequently Asked Questions
The BMO Canadian High Dividend Covered Call ETF (ZWC.TO) is designed to provide exposure to a diversified portfolio of Canadian dividend stocks while earning call option premiums. It aims for high passive income with a current net yield of about 4.9%.
As of early March 2026, the BMO Canadian High Dividend Covered Call ETF has a 1-Year Return of 21.83% and a 5-Year Return of 29.47%. It also shows a monthly distribution with a recent dividend of $0.1050.
The BMO Canadian High Dividend Covered Call ETF generates income through a combination of dividends from its underlying portfolio of stocks and premiums from writing covered call options. This strategy provides investors with potential downside protection and additional income.
Investing in dividend ETFs comes with risks such as market risk, interest rate risk, and the potential for dividend cuts. It's essential to understand the underlying assets and market conditions to make informed investment decisions.
To compare different dividend ETFs, consider factors such as dividend yield, expense ratios, historical performance, and the underlying assets' diversification. Analyzing these metrics can help you choose the ETF that best fits your investment strategy.
Besides the BMO Canadian High Dividend Covered Call ETF, you may consider the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ.TO). This ETF tracks companies that have consistently increased dividends for at least five years, offering a 12-month trailing yield of 3.23%.
