Examining a theory on the lagging popularity
The average asset level for the dividend exchange-traded funds in theis $906-million, compared to an average of $4-billion in the Canadian equity category. The biggest Canadian dividend ETF in the guide has $2.5-billion in assets, while four Canadian equity ETF hold approximately $6-billion or more.
The same applies to sectors. Utilities and telecoms are classic dividend sectors that have struggled lately. A dividend ETF will have some exposure to these sectors, but also to the better-performing energy and financial sectors.The construction of dividend ETFs varies somewhat, but there is almost always some degree of emphasis on dividend growth. But this growth refers more to the stocks in the portfolio than to the distributions of dividend income that investors receive.
Long-term growth in dividend ETF distributions is not uncommon, but it’s quite a bit different than owning individual stocks. With a stock, you can see more cash coming into your investment account after a company increases its dividend. With a dividend ETF, you rely on the managers of the fund to fix the amount of dividends distributed to investors each month.
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