Toronto-based BlackRock Asset Management Canada Ltd. Monday launched iShares U.S. High Dividend Equity Index Fund (CAD-Hedged) (TSX:XHD) in the Canadian marketplace.
The new exchange-traded fund seeks to provide investors with access to high-quality, dividend paying U.S. companies as another way to help them better meet their income needs. The ETF began trading on the Toronto Stock Exchange on Monday.
“In today’s investing environment, income generation and higher yield equities are top of mind for many investors,” says Mary Anne Wiley, managing director, head of iShares, BlackRock Canada. “Our most recent investor survey found that 93% believe that generating income is an important factor in making investment decisions.”
The fund seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the Morningstar Dividend Yield Focus Index (CAD-Hedged), net of expenses. It offers investors access to dividend-paying U.S. companies that have been screened for superior company quality and financial health, with the added benefit of liquidity. The fund’s U.S. dollar exposure is hedged back to Canadian dollars to remove the impact of currency volatility and keep the fund’s risk profile as low as possible.
“The companies XHD tracks are the 75 highest dividend paying stocks in the Morningstar US Market Index that also meet a list of financial health criteria’,” says Oliver McMahon, head of iShares product management at BlackRock Canada. “This approach helps decrease equity risk in a portfolio given the historically high-quality, low-volatility characteristics of its dividend stock holdings and offers compelling potential for both capital appreciation and income distribution.”