Dividend ETFs can be an option for RRSPs because investors can still get paid while waiting for calmer markets.monsitj/iStockPhoto / Getty Images
Investors may wonder how to invest their retirement savings this year, given potentially turbulent markets.
North American stock indexes are trading close to record highs, geopolitical tensions have heightened amid U.S. tariff threats, and the U.S. market is often volatile during mid-term election years.
Given these jitters, dividend exchange-traded funds (ETFs) can be an option for registered retirement savings plans (RRSPs) because investors can still get paid while waiting for calmer markets.
Keep in mind that Canadian-listed foreign dividend ETFs inside an RRSP face a withholding tax on dividends of about 15 per cent. U.S.-listed dividend ETFs can be exempt from the U.S. withholding tax.
Globe Advisor asked three investment experts for their top dividend ETF picks for an RRSP.
Daniel Straus, managing director of ETF research, National Bank Financial, Toronto
The pick: Manulife Smart International Dividend ETF IDIV.B-T
This active ETF, which uses a quantitative strategy to screen dividend stocks in developed countries outside of Canada and the U.S., is attractive for diversification within an RRSP, Mr. Straus says.
The fund managers seem to have done a good job “to achieve alpha,” although most of the gain came last year, he says. Top holdings include HSBC Holdings PLC HSBC-N and Novartis AG NVS-N.
This unhedged, active ETF posted a 22.3-per-cent annualized return for the three years ended Dec. 31, 2025, versus 18.5-per-cent for the MSCI EAFE Index. This fund’s 12-month yield is 2.8 per cent.
The ETF’s 0.40-per-cent management expense ratio (MER) is competitive for an active fund, Mr. Straus says.
The withholding tax is “a small price to pay” because any dividend income is tax-deferred to be withdrawn when one’s tax bracket is likely lower, he adds.
The pick: Global X SuperDividend U.S. ETF DIV-A
This U.S.-listed ETF, which owns high-yielding U.S. dividend stocks, is attractive for yield seekers who can also get an exemption from the withholding tax, Mr. Straus says. (Investors need to fill out a W-8BEN form at a financial institution.)
The ETF, which tracks an index of 50 equally weighted common stocks, master limited partnerships and real estate investment trusts (REITs), aims to avoid companies that could potentially cut their dividends, he says.
Although this fund has underperformed the S&P 500 index over the past decade, it offers an annual distribution yield in the 7-per-cent range that can include some return of capital, he adds.
The 0.45-per-cent MER is competitive for its unique methodology, while the risk stems from possible dividend cuts that “can never be fully eliminated,” he says.
Mike Philbrick, chief executive officer of ReSolve Asset Management Inc., Toronto
The pick: CI International Quality Dividend Growth Index ETF IQD-B-T
This ETF can be used as a satellite position inside an RRSP to add diversified currency, sector and valuation exposure beyond the core, low-fee Canadian and U.S. funds, Mr. Philbrick says.
“The U.S. market has got some fairly richly valued companies,” but some foreign markets with slightly better valuations outpaced the U.S last year, he notes.
The CI ETF, which also has a currency-hedged version, screens for quality companies and growing dividends, but a risk is that it can lag in momentum-driven markets, he says.
While the withholding tax reduces dividend income, investors should focus on the total return and consider that share buybacks are also a form of dividend, he notes.
The 0.51-per-cent MER is reasonable for convenient exposure to many countries, he adds.
The pick: BMO International Dividend ETF ZDI-T
This international ETF can provide diversification beyond North American markets, but it also invests in high-yielding dividends that may hold appeal for yield-seekers, Mr. Philbrick says.
“Last year, we had an outperformance by international stocks over U.S. stocks,” he says. “That usually persists for several years.”
In U.S. dollar terms, the Japanese, Canadian and European markets outpaced the S&P 500 in 2025.
The ETF’s biggest sector weighting is financials, at 25 per cent, followed by industrials, at 15 per cent, and health care, at 12 per cent. Top country weightings include Japan, the U.K. and France.
A risk stems from owning yield-driven sectors, such as financials, which can be hurt by rising interest rates, he says.
The 0.44-per-cent MER is a “fair price for packaged international dividend exposure.”
Richard Orrell, portfolio manager, R.N. Croft Financial Group Inc., Toronto
The pick: Franklin International Low Volatility High Dividend Index ETF FLVI-NE
This international equity ETF, which holds high-dividend-paying stocks with low volatility, can complement U.S. equity ETFs that have benefited from big tech names, Mr. Orrell says.
“The weighted average of the 12-month trailing price-to-earnings ratio [for this ETF] is 13.97, which may appeal to value-oriented investors,” he says.
This ETF, which launched last March, gained 33.7 per cent in 2025, and outpaced the MSCI EAFE [Europe, Australasia and Far East] benchmark by 8.5 per cent, he notes. The fund’s top country holdings are Japan, Singapore and Italy.
The ETF is overweight interest rate-sensitive European utilities versus the MSCI EAFE Index, and while that could be a potential risk, interest rates are heading down in most countries, he says.
The MER is 0.52 per cent but is set to rise to 0.67 per cent by June 20, he notes.
The pick: BMO US High Dividend Covered Call Hedged to CAD ETF ZWS-T
This U.S. equity ETF, which gives exposure to high-dividend U.S stocks, can also provide limited downside protection because it earns income from call option premiums, Mr. Orrell says.
Although many U.S. stocks have run up on the artificial intelligence theme, there are still opportunities among high-yielding dividend stocks, he adds. The annual distribution yield is about 6 per cent.
This fund’s two largest holdings are health care stocks Merck & Co. Inc. MRK-N and AbbVie Inc. ABBV-N. The ETF also has a lower 24-per-cent weighting in technology names, versus 34 per cent for SPDR S&P 500 ETF Trust SPY-A, he notes.
Despite the withholding tax on dividends in this U.S. equity ETF, “I am placing more weight on the global diversification and covered-call strategy to buffer some volatility,” he says.
The 0.71-per-cent MER is at the high end, but reasonable given that a covered-call strategy is difficult for the average investor, he adds.