Like High Yields? This ETF Is for You

Are you an income investor looking for some quality dividend stocks to hold? A great option to consider is the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY). The exchange-traded fund (ETF) has a yield of 3.8% -- that's better than the S&P 500 which averages around 1.6% right now. The fund also makes monthly distributors, so you can collect cash on a much more regular basis than if you were to invest in a single stock (a stock often makes dividend payments every quarter).

With the Vanguard fund, you're also getting some great diversification. It holds 47 stocks in its portfolio, and they are reasonably valued, trading at average price-to-earnings multiples of 11. They also average a modest price-to-book ratio of 1.7. Financial stocks make up the bulk of the ETF, accounting for about 54%, followed by energy stocks at 28%, telecom stocks at 9%, and utilities at 6%.

The top stocks in the fund include Royal Bank of Canada (TSX:RY)(NYSE:RY), Toronto-Dominion Bank (TSX:TD)(NYSE:TD), and Enbridge (TSX:ENB)(NYSE:ENB). The fund has a modest management fee of 0.2%, which isn't high for this level of diversification.


Year to date, shares of the Vanguard ETF are down a modest 1.5%, as it has proven to be a fairly stable investment. Including its dividend, the fund's total returns are about 0.7%. Although that isn't terribly impressive, it's still a positive return in what's been a very tough market this year; the TSX is down more than 6% since the start of 2022.