4 Best Dividend Growth ETFs in Canada (July 2026)
The best dividend growth ETFs in Canada include DGR-B.TO (~0.38% MER), DGRC.TO (~0.35%), ZDY.TO (~0.39%), and XDG.TO (~0.11%). These ETFs focus on companies that consistently increase dividends, offering a balance of income and long-term growth for TFSA, RRSP, or non-registered investors.
Dividend growth ETFs are designed for Canadian investors who want a combination of rising income and long-term capital appreciation. Instead of focusing on the highest yield, these ETFs target companies that consistently increase their dividends over time. Funds like DGR-B.TO and DGRC.TO emphasize dividend growth in U.S. markets, while ZDY.TO and XDG.TO provide exposure to established dividend-paying companies with strong growth histories.
The key difference with dividend growth ETFs is that they prioritize quality and sustainability over immediate income. DGR-B.TO and DGRC.TO focus on companies with strong earnings growth and dividend consistency, while ZDY.TO and XDG.TO offer broader exposure to dividend growers but with slightly higher yields.
In this guide, we break down the best dividend growth ETFs in Canada, comparing growth potential, dividend sustainability, fees, and tax considerations so you can choose the right ETF for your TFSA, RRSP, or long-term income portfolio.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top DGR-B.TO CI WisdomTree U.S. Quality Dividend Growth Index ETF | — | $330M | 1.17% | +10.35% | — |
DGRC.TO CI Canada Quality Dividend Growth Index ETF | — | $934M | 2.45% | +12.87% | +31.92% |
ZDY.TO BMO US Dividend ETF (CAD) | 0.30% | $902M | 1.48% | +16.49% | +31.57% |
XDG.TO iShares Core MSCI Global Quality Dividend Index ETF | — | $744M | 2.81% | +12.80% | +22.40% |
What Is an ETF?
A dividend growth ETF in Canada is an exchange-traded fund that invests in companies with a history of consistently increasing their dividends over time. Unlike high-yield ETFs, these funds focus on dividend sustainability, earnings growth, and long-term total return rather than maximizing current income.
For example, DGR-B.TO (~0.38% MER) tracks a U.S. dividend growth strategy focused on high-quality companies with strong fundamentals, while DGRC.TO (~0.35% MER) applies a similar dividend growth screening approach. ZDY.TO (~0.39% MER) and XDG.TO (~0.11% MER) provide diversified exposure to U.S. dividend-paying companies with a focus on stability and growth.
Dividend growth ETFs are commonly used in TFSAs and RRSPs for long-term investing because they balance income and capital appreciation. However, since many of these ETFs hold U.S. stocks, investors should consider foreign withholding tax and currency exposure when choosing the right account.
The 4 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
CI WisdomTree U.S. Quality Dividend Growth Index ETF
$64.51
+10.35% YTD
CI Canada Quality Dividend Growth Index ETF
$54.19
+12.87% YTD
NA
Returns
YTD
+12.87%
1Y
+31.92%
3Y
+20.69%
5Y
+13.01%
BMO US Dividend ETF (CAD)
$58.62
+16.49% YTD
Returns
YTD
+16.49%
1Y
+31.57%
3Y
+20.23%
5Y
+14.72%
iShares Core MSCI Global Quality Dividend Index ETF
$33.83
+12.80% YTD
NA
Returns
YTD
+12.80%
1Y
+22.40%
3Y
+16.54%
5Y
+11.76%
Pros & Cons
Pros
- Focus on companies that consistently grow dividends over time rather than chasing high yield
- Strong long-term total return potential from both dividend growth and capital appreciation
- Exposure to high-quality companies with stable earnings and payout ratios
- Suitable for long-term TFSA or RRSP investors seeking a balance of income and growth
Cons
- Lower starting yield compared to high-dividend ETFs like VDY.TO or ZWC.TO
- Most funds (DGR-B.TO, ZDY.TO, XDG.TO) are heavily U.S.-focused, reducing Canadian exposure
- Foreign withholding tax applies on U.S. dividends, especially in a TFSA
- Returns can lag high-yield ETFs during periods when income stocks outperform
Compare These ETFs Head-to-Head
Drill into a side-by-side breakdown of performance, AUM, and yield.
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Frequently Asked Questions
What is the best dividend ETF in Canada?
DGR-B.TO is a popular dividend growth ETF because it focuses on high-quality U.S. companies with consistent dividend increases and an MER around 0.38%. Investors looking for lower fees may consider XDG.TO (~0.11% MER), which provides diversified exposure to U.S. dividend growers at a lower cost.
What’s the difference between dividend growth ETFs and high dividend ETFs?
Dividend growth ETFs like DGR-B.TO focus on companies that increase their dividends over time, while high dividend ETFs like VDY.TO prioritize higher current yield. Dividend growth ETFs typically offer lower starting income but stronger long-term total return potential due to earnings growth.
Are dividend growth ETFs good for a TFSA?
Yes, dividend growth ETFs like XDG.TO and DGRC.TO are well-suited for a TFSA because they focus on long-term capital appreciation and tax-free growth. However, since many hold U.S. stocks, dividends may still be subject to foreign withholding tax at the fund level.