Vanguard FTSE Canadian High Dividend Yield Index ETF Sees Exceptional Returns

The Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY) has been one of Canada's most prominent dividend-focused exchange-traded funds, providing investors with exposure to established Canadian companies that pay relatively high dividends. As of September 9, 2026, the ETF had approximately C$9.1 billion in assets and a net asset value (NAV) of around C$76.82.

The ETF has been performing exceptionally well, with a year-to-date return of approximately 27.5% and a one-year return of around 44.8%. The indicative trailing distribution yield is currently around 3%, with distributions paid monthly. However, investors should focus on dividend growth and sustainability rather than just the headline distribution.

The ETF's strategy differs from broad Canadian-market ETFs, such as XIC or ZCN, by placing greater emphasis on companies that pay relatively high dividends. This has led to significant exposure to Canada's mature financial and energy sectors, with approximately 59.8% of the portfolio in financials and 28.4% in energy.

The top holdings in VDY include Royal Bank of Canada (RBC) and Toronto-Dominion Bank (TD), which together represent a substantial portion of the portfolio. Investors should closely monitor bank earnings, loan growth, net interest margins, credit quality, capital markets, and dividend announcements to gauge the ETF's performance.