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Search for an ETF or holding
Updated 2mo ago.
Updated 2mo ago.
Dividend yield is the ratio between an ETF's (or stock's) annual distribution and its current price, expressed as a percentage. For example, an ETF that pays $2 per year and trades at $50 has a dividend yield of 4%.
XEI.TO (iShares S&P/TSX Composite High Dividend Index ETF) has a dividend yield of about 4.5%. If you invest $10,000, you receive roughly $450 per year in distributions, paid monthly. This yield fluctuates: if the ETF price drops and distributions stay stable, the yield rises (and vice versa).
A high dividend yield doesn't always mean a good investment. You also need to look at price growth and total return. An ETF with 2% dividends but 10% growth often beats an ETF with 5% dividends and 0% growth. In a non-registered account, Canadian dividends benefit from the dividend tax credit.