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Highest-Paying Dividend ETFs in Canada (October 2026): 24 TSX Funds Ranked by Yield
As of October 6, 2026, the highest-yielding traditional Canadian dividend ETF is the iShares S&P/TSX Composite High Dividend Index ETF (XEI) at 3.51%, ahead of XDV (3.41%), XDIV (3.15%) and VDY (2.90%). Yields are low because these funds returned about 30% in a year, and a higher price means a lower yield. The much higher payers are covered call ETFs: Hamilton UMAX (15.2%), Evolve BANK (13.9%), Hamilton HYLD and HMAX (11.6%) and Hamilton HDIV (9.6%). Those payouts come mostly from option premium, and several funds add about 25% leverage. All of the funds below pay monthly.
How we ranked them
Every figure here was pulled on October 6, 2026.
- Yield is the trailing 12-month yield: the cash each fund paid over the last year, divided by today's unit price. It is a record of what was paid, not a promise.
- Total return is the one-year return including distributions.
- We reviewed 30 widely held TSX-listed income ETFs and ranked the 24 below.
- We split them into groups, because the cash comes from different places. Dividend ETFs pass along dividends paid by the companies they own. Covered call ETFs add money earned by selling call options, and some also borrow to invest more.
For comparison, the S&P/TSX 60 (through XIU) yields 2.14%.
The highest-paying traditional dividend ETFs
These seven funds hold Canadian dividend stocks and nothing else. No options and no borrowing.
| Rank | ETF | Yield | Fee | Assets | 1-year total return |
|---|---|---|---|---|---|
| 1 | XEI iShares S&P/TSX Composite High Dividend | 3.51% | 0.23% | $4.27B | +28.43% |
| 2 | XDV iShares Canadian Select Dividend | 3.41% | 0.56% | $2.57B | +32.88% |
| 3 | XDIV iShares Core MSCI Canadian Quality Dividend | 3.15% | 0.12% | $6.20B | +34.80% |
| 4 | FCCD Fidelity Canadian High Dividend | 3.08% | 0.39% | $384M | +17.38% |
| 5 | CDZ iShares S&P/TSX Canadian Dividend Aristocrats | 3.05% | 0.68% | $1.21B | +15.26% |
| 6 | VDY Vanguard FTSE Canadian High Dividend Yield | 2.90% | 0.23% | $8.97B | +34.04% |
| 7 | ZDV BMO Canadian Dividend | 2.69% | 0.39% | $1.88B | +28.52% |
Source: StockAnalysis fund data, October 6, 2026. Fee is the expense ratio shown there. All pay monthly.
Why these yields look small
Canadian banks, pipelines and energy stocks rallied hard over the past year. XEI is up 28% and VDY is up 34% with dividends included. Payouts did not keep pace. XEI's monthly distribution actually slipped from 11.7 cents to 11.4 cents a unit in July. A flat payout on a much higher price means a lower yield.
That is good news if you already own them. It also means the highest-yielding classic dividend ETF now pays only about 1.4 percentage points more than the plain index (XIU, 2.14%).
For a closer look at these funds, see top Canadian dividend ETFs for 2026.
See what these would pay you. Add any fund to the free RiskStock Dividend Tracker to see your projected annual and monthly income, upcoming ex-dividend dates and dividend growth. For TSX funds, type the ticker with .TO on the end, such as XEI.TO.
Two higher-yield options without covered calls
Preferred shares and REITs pay more than common stocks. Neither uses options.
| ETF | Yield | Fee | Assets | 1-year total return |
|---|---|---|---|---|
| ZPR BMO Laddered Preferred Share Index | 5.28% | 0.53% | $1.63B | +12.67% |
| ZRE BMO Equal Weight REITs Index | 4.74% | 0.63% | $587M | +1.07% |
Source: StockAnalysis fund data, October 6, 2026.
Preferred shares act more like bonds: steady payouts and little growth. REIT payouts are mostly taxed as regular income or return of capital rather than as eligible dividends, so REIT funds fit best in a registered account.
The highest-paying covered call ETFs in Canada
This is where the 9% to 15% yields are. These funds own stocks and sell call options against them. The option premium is paid out monthly. In exchange, the fund gives up part of the gains when its stocks rise. Several also borrow about 25% extra to invest, which lifts the payout and the risk. Our full guide: covered call ETFs explained.
| Rank | ETF | Yield | Fee | What it holds | 1-year total return |
|---|---|---|---|---|---|
| 1 | HHIS Harvest Diversified High Income Shares | 26.87% | 2.00% | Single-stock option ETFs on US companies, with about 25% leverage | +19.37% |
| 2 | UMAX Hamilton Utilities Yield Maximizer | 15.23% | 0.98% | Utilities, pipelines, telecoms and railways | +0.57% |
| 3 | BANK Evolve Canadian Banks and Lifecos Enhanced Yield | 13.90% | 1.73% | Canadian banks and life insurers, up to 25% leverage | +45.31% |
| 4 | HYLD Hamilton Enhanced U.S. Covered Call | 11.62% | See note | US covered call ETFs, with about 25% leverage | +25.46% |
| 5 | HMAX Hamilton Canadian Financials Yield Maximizer | 11.60% | 0.93% | Canadian banks and insurers | +25.89% |
| 6 | ENCC Global X Canadian Oil and Gas Equity Covered Call | 11.37% | 1.08% | Canadian oil and gas producers | +30.84% |
| 7 | HDIF Harvest Diversified Monthly Income | 10.86% | 2.28% | Harvest covered call ETFs | +20.49% |
| 8 | SMAX Hamilton U.S. Equity Yield Maximizer | 9.68% | 0.82% | Large US companies | +26.84% |
| 9 | EMAX Hamilton Energy Yield Maximizer | 9.64% | 0.97% | North American energy companies | +43.38% |
| 10 | HDIV Hamilton Enhanced Canadian Covered Call | 9.59% | 1.88% | Canadian covered call ETFs, with 25% leverage | +27.74% |
| 11 | BKCC Global X Equal Weight Canadian Bank Covered Call | 9.31% | 1.05% | The big Canadian banks | +31.20% |
| 12 | QMAX Hamilton Technology Yield Maximizer | 9.26% | 0.80% | Large US technology companies | +32.15% |
Source: StockAnalysis fund data, October 6, 2026. Fee is the expense ratio shown there. Note: HYLD charges no management fee of its own, but you pay the fees of the funds it holds plus its borrowing costs. All pay monthly.
A few things the table does not show
HHIS (26.9%) is not a Canadian dividend fund. It holds Harvest's single-stock option ETFs on US companies such as Nvidia, Apple, Microsoft and Eli Lilly, and uses about 25% leverage. It launched in January 2025, so it has never been through a long market decline.
UMAX (15.2%) barely broke even. It paid the second-highest yield here, yet its one-year total return was 0.57%. Nearly all of the payout was offset by a falling unit price.
The bank funds had a great year because banks did. BANK returned 45% and HMAX returned 26%. Those results depend on the sector, not on the option strategy. A plain bank ETF captures more of a rally and pays less along the way.
Fees are much higher. Most of these funds cost 0.8% to 2.3% a year, against 0.12% for XDIV.
Lower-yield covered call ETFs from BMO
BMO's funds sell options on only part of the portfolio and use no leverage. They pay less than the funds above and keep more of the upside.
| ETF | Yield | Fee | Assets | 1-year total return |
|---|---|---|---|---|
| ZWU BMO Covered Call Utilities | 7.69% | 0.94% | $2.10B | +1.64% |
| ZWC BMO Canadian High Dividend Covered Call | 6.02% | 0.92% | $2.42B | +18.92% |
| ZWB BMO Covered Call Canadian Banks | 5.53% | 0.91% | $4.52B | +37.05% |
Source: StockAnalysis fund data, October 6, 2026.
A warning about the highest numbers
The Harvest Premium Yield Treasury ETF (HPYT) showed a 15.97% trailing yield. It sells options on US Treasury bond funds, not stocks. Its one-year total return was -8.90%. Investors collected the payout and still lost money, because the unit price fell by more.
Always check total return next to yield. A distribution that is larger than what the fund earns is partly your own money coming back to you.
What $10,000 pays in a year
Based on the trailing yield, before taxes. Payouts change, so treat this as a guide.
| ETF | Yield | Income per year | Income per month |
|---|---|---|---|
| UMAX | 15.23% | $1,523 | $127 |
| BANK | 13.90% | $1,390 | $116 |
| HMAX | 11.60% | $1,160 | $97 |
| HDIV | 9.59% | $959 | $80 |
| ZWC | 6.02% | $602 | $50 |
| ZPR | 5.28% | $528 | $44 |
| XEI | 3.51% | $351 | $29 |
| VDY | 2.90% | $290 | $24 |
| XIU (S&P/TSX 60) | 2.14% | $214 | $18 |
To run these numbers on what you actually own, use the Dividend Tracker. To see how regular contributions grow, try the DCA calculator.
Which fund stands out for what
This is not a recommendation. It is how the numbers sort.
- Highest yield from a traditional dividend ETF: XEI (3.51%).
- Lowest fee: XDIV (0.12%), which also had the best one-year total return of the seven, at 34.80%.
- Largest: VDY ($8.97B).
- Highest yield without options or leverage: ZPR (5.28%), in preferred shares.
- Highest yields among the Canadian-stock covered call funds: UMAX (15.23%), BANK (13.90%) and HMAX (11.60%).
- Most conservative covered call funds: BMO's ZWC, ZWB and ZWU.
Taxes and which account to use
Eligible Canadian dividends get the dividend tax credit in a non-registered account. That makes funds like XEI, VDY and XDIV tax-efficient outside a registered plan.
Covered call distributions are usually a mix of eligible dividends, capital gains and return of capital (ROC). ROC is not taxed when you receive it, but it lowers your adjusted cost base, so you pay more capital gains tax when you sell. You have to track it.
REIT distributions are mostly regular income and ROC, not eligible dividends.
In a TFSA, RRSP or FHSA, none of this is taxed as it is paid, and there is no cost base to track. That makes registered accounts the simplest home for covered call and REIT funds.
Funds holding US stocks (HYLD, SMAX, QMAX, HHIS) lose 15% of their US dividends to withholding tax before the money reaches you. In a TFSA, RRSP or FHSA, that tax cannot be recovered. Details in the 15% tax on US dividends.
Fund companies report the exact breakdown each year on a T3 slip.
Five checks before you buy for yield
- Look at total return, not just yield. UMAX and HPYT show why.
- Find out where the payout comes from. Dividends, option premium, borrowed money or return of capital.
- Check for leverage. HDIV, HYLD, BANK and HHIS all borrow. Losses are bigger in a downturn.
- Compare the fee. 1.88% a year on HDIV is about 16 times the fee on XDIV.
- Check the unit price over several years. A price that keeps sliding means the payout is eating your capital.
The bottom line
Canada's traditional dividend ETFs now yield about 3% after a very strong year for prices. XEI pays the most of that group at 3.51%. To get 9% to 15%, you have to move to covered call funds, and you accept capped growth, higher fees and, in several cases, leverage. A common approach is a core of low-cost dividend ETFs with a smaller slice of covered call funds for extra cash flow. If you reinvest the payouts, set up a DRIP.
Looking at US-listed funds as well? See the highest-paying dividend ETFs in the US.
Frequently asked questions
Which Canadian ETF pays the highest dividend?
Among traditional Canadian dividend ETFs, the iShares S&P/TSX Composite High Dividend Index ETF (XEI) had the highest trailing 12-month yield at 3.51% as of October 6, 2026. Covered call ETFs pay far more: Hamilton Utilities Yield Maximizer (UMAX) yielded 15.2% and Evolve's BANK yielded 13.9%. The Harvest Diversified High Income Shares ETF (HHIS) showed 26.9%, but it is a leveraged fund of single-stock option ETFs on US companies, not a dividend fund.
Why are Canadian dividend ETF yields so low in 2026?
Because prices went up. XEI returned 28% and VDY returned 34% over the year to October 6, 2026. Yield is the payout divided by the price, so when the price climbs faster than the dividend, the yield falls. Investors who already owned these funds did very well. New buyers get less income per dollar.
Which Canadian dividend ETFs pay monthly?
All of the funds in this ranking pay monthly, including XEI, XDV, XDIV, VDY, ZDV, CDZ, FCCD, and the covered call funds HMAX, UMAX, HDIV, HYLD, BANK, ZWC, ZWB and ZWU.
Is HMAX a dividend ETF?
Not in the traditional sense. HMAX owns Canadian banks and insurers and sells call options on them. Its 11.6% trailing yield is mostly option premium, with the stocks' own dividends making up a smaller part. Selling the options limits how much the fund can gain when bank shares rise.
How are covered call ETF distributions taxed in Canada?
In a non-registered account, the distribution is usually a mix of eligible Canadian dividends, capital gains and return of capital. Return of capital is not taxed when you receive it, but it lowers your adjusted cost base, which increases your capital gain when you sell. The exact mix is reported on your T3 slip each year. Inside a TFSA, RRSP or FHSA, distributions are not taxed as they are paid.
How much do I need invested to earn $1,000 a month in Canada?
$1,000 a month is $12,000 a year. At XEI's 3.51% yield that takes about $342,000. At ZWC's 6.02% it takes about $199,000, and at HMAX's 11.60% about $103,000. The higher-yield route needs less capital but gives up growth and puts more of your payout at risk.
How do I add a TSX ETF to the RiskStock Dividend Tracker?
Type the ticker with .TO on the end, for example XEI.TO or HMAX.TO, then enter your number of units. The tracker shows projected annual and monthly income in Canadian dollars.
Primary sources
- StockAnalysis — TSX ETF dividend yield, expense ratio, assets and total return data (retrieved October 6, 2026)
- BlackRock Canada — iShares S&P/TSX Composite High Dividend Index ETF (XEI) fund page
- Vanguard Canada — FTSE Canadian High Dividend Yield Index ETF (VDY) fund page
- Hamilton ETFs — Canadian Financials Yield Maximizer ETF (HMAX) fund page
- Hamilton ETFs — Enhanced Canadian Covered Call ETF (HDIV) fund page
- Evolve ETFs — Canadian Banks and Lifecos Enhanced Yield Index Fund (BANK) fund page
- Harvest ETFs — Diversified High Income Shares ETF (HHIS) fund page
- Canada Revenue Agency — Line 40425: Federal dividend tax credit
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 6, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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