XEI vs. ZDV: Which dividend-paying ETF is good for long-term holding?

Asked 4 years ago

ZDV is cheaper (18+/-) with a lower dividend (0.065) monthly, a yield of 4.40%, and YTD return of12.63% Xei is more expensive (23+/-) with a higher dividend (0.075) monthly, a yield of 4.41%, and YTD return of 17.85%. Their holdings are about the same, I want to avoid too much overlap in my portfolio. I’d like to set it and forget it with one of these ETF’s. Is XEI sitting towards the top of its margin presently for its purchase price?

Dividend etf Long-term investments Opinions on etfs

Andrew Moran

Thursday, June 03, 2021

On the one hand, I do like ZDV's price as an entry point since it is most likely to hit $20 soon. On the other, XEI seems to be the superior option, even though it is more expensive.
Two reasons.
The first is that, as you pointed out, XEI possesses a higher monthly dividend.
The second, and I think this is important, is its holdings. XEI is heavily weighted toward the financial and energy sectors. But look at the commodity stocks inside XEI: Enbridge, Pembina Pipeline, Suncor Energy, and Nutrien.
Under today's market conditions, these four are perhaps some of the most valuable stocks today with more room for growth. Crude oil and natural gas prices are back on the rise, and agricultural prices are booming.
Although I like that ZDV is BMO-backed, XEI is the superior investment vehicle.

Andia Rispah Igobwa

Monday, August 23, 2021

ZDV and XEI are good because they have high-quality holdings, excellent yields, full liquidity, diversification and low costs. 
TD Canadian Dividend is a new ETF with a similar investment objective to ZDV but different dividend weightings. 
It also offers quite an attractive pricing at 1.4% TER (vs. 2% for ZDV). This fund will be my first choice if you want to go with an ETF.
Finally, the S&P/TSX Capped REIT Index Fund (REIF) offers exposure to Canadian REITs while yielding 2%.