US dividend ETFs give Canadian investors access to companies like Johnson & Johnson, Procter & Gamble, and Coca-Cola that have raised dividends for 25–60+ consecutive years. The critical decision is which account to hold them in: the Canada-US tax treaty eliminates the 15% withholding tax on US dividends held in an RRSP, but not a TFSA. On a $100,000 US dividend position yielding 3%, that’s $450 per year in tax you either save or lose based purely on account choice. For the lowest total cost, hold USD-listed funds like VYM or SCHD (0.06% MER) directly in your RRSP. For the full asset-location framework, see best account type for US stocks and ETFs in Canada.
Best US Dividend ETFs for Canadians 2026
CAD-Listed (TSX)
| ETF | Ticker | MER | Yield | Focus |
|---|---|---|---|---|
| BMO US Dividend | ZDY | 0.33% | ~2.8% | US high dividend |
| Vanguard US Dividend Appreciation | VGG | 0.30% | ~1.6% | US dividend growers |
| BMO US High Dividend Covered Call | ZWH | 0.72% | ~6.5% | US dividend + covered call |
| iShares US High Dividend Equity (CAD) | XHD | 0.33% | ~3.0% | US high dividend |
USD-Listed (Requires USD Account)
| ETF | Ticker | MER | Yield | Focus |
|---|---|---|---|---|
| Vanguard High Dividend Yield | VYM | 0.06% | ~2.8% | US high dividend |
| Schwab US Dividend Equity | SCHD | 0.06% | ~3.4% | US quality dividend |
| iShares Core High Dividend | HDV | 0.08% | ~3.5% | US high dividend |
| Vanguard Dividend Appreciation | VIG | 0.06% | ~1.7% | US dividend growers |
Tax Efficiency by Account
| Account | CAD-Listed (ZDY) | USD-Listed (VYM) |
|---|---|---|
| RRSP | 15% WHT on dividends (one layer) | 0% WHT (treaty exempt) ✅ |
| TFSA | 15% WHT (unrecoverable) | 15% WHT (unrecoverable) |
| Non-registered | 15% WHT (foreign tax credit) | 15% WHT (foreign tax credit) |
Best strategy: Hold USD-listed US dividend ETFs (VYM/SCHD) in RRSP to eliminate withholding tax completely.
The treaty side of that rule is explained in US dividend withholding tax in RRSP Canada.
ZDY vs VYM
| Feature | ZDY (CAD) | VYM (USD) |
|---|---|---|
| MER | 0.33% | 0.06% |
| Currency | CAD on TSX | USD on NYSE |
| WHT in RRSP | 15% | 0% |
| Convenience | ✅ Trade in CAD | Need USD |
| Total cost (RRSP) | ~0.33% MER + ~0.4% WHT drag | 0.06% MER + $0 WHT |
If you are willing to buy the USD-listed version, use Norbert’s Gambit to reduce conversion costs.
Who Should Buy US Dividend ETFs
| Profile | Recommendation |
|---|---|
| RRSP investor wanting US income | ✅ VYM/SCHD (USD) in RRSP |
| Don’t want USD hassle | ✅ ZDY or VGG in CAD |
| Want highest yield | ✅ ZWH (covered call) ~6%+ |
| Already hold VDY (Canadian dividends) | ✅ Good US complement |
If you are building a broader retirement-income sleeve rather than a pure dividend sleeve, compare these with best ETFs for retirement income in Canada.
For the Canadian side of the portfolio, see best dividend ETFs in Canada.
The Bottom Line
VYM or SCHD in your RRSP is the most cost-efficient way to earn US dividend income — no withholding tax and rock-bottom MERs. If you don’t want to deal with USD conversion, ZDY or VGG on the TSX are solid CAD alternatives at a slightly higher cost. Pair with Canadian dividend ETFs like VDY for a diversified income portfolio.
SCHD vs VYM: which US dividend ETF is better?
The two most popular USD-listed US dividend ETFs for Canadian RRSP holders are SCHD and VYM. Here is how they compare:
| Feature | SCHD | VYM |
|---|---|---|
| MER | 0.06% | 0.06% |
| Holdings | ~100 | ~450 |
| Dividend yield | ~3.4–3.7% | ~2.7–3.0% |
| Focus | Quality + dividend growth screened | High current yield |
| 5-year total return | ~10–12% annualized | ~9–11% annualized |
| Sector tilt | Financials, industrials, healthcare | Financials, energy, healthcare |
SCHD applies an additional quality screen (5-year dividend growth, cash flow to debt ratio, return on equity), which means its holdings are more selective. It has historically delivered slightly better total returns than VYM with a higher yield. VYM is simpler and holds more companies.
Recommendation: For most Canadian RRSP investors, SCHD is the stronger pick due to its combination of quality screening, dividend growth focus, and competitive yield. Both should be held in an RRSP to benefit from the 0% withholding tax treaty.
Setting up Norbert’s Gambit for US dividend ETFs
Buying VYM or SCHD requires converting CAD to USD. For purchases over $10,000, Norbert’s Gambit can reduce your conversion cost from 1.5%+ to roughly 0.1%. The general steps:
- Buy a dual-listed ETF like DLR (Toronto) in CAD
- Call your broker (same day or next day) to “journal” the shares to the USD side (DLR.U)
- Sell DLR.U in USD
- Use the USD to buy VYM or SCHD
The process takes 2–3 business days and requires a broker that supports USD accounts (Questrade, IBKR, TD Direct). See our full Norbert’s Gambit guide for step-by-step instructions.