Recently, we ran a stock filter on GoogleInvestor.com to find highest paying dividend ETFs in Canada. You can see the result below as of today (February 18, 2010).

If you are interested running this filter yourself; go to Globe Investor’s stock filter. Select Security type as “ETF”. When you get the result, click on “$ Change” or “% Change”; and you’ll get Dividend Yield column.

Are we recommending those ETFs? Some of them, yes. In fact, we currently own iShares S&P/TSX REIT ETF. Do your own research and consult your financial advisor before buying any of these ETFs.

We don’t recommend iShares S&P/TSX Income Trust ETF for now since there’ll be a new regulation regarding income trusts starting next year (2011). They’ll be taxed in the same way as corporation. So, we can expect the dividend yield might go down significantly.

The yield of BMO Emerging Markets ETF looks suspicious. Emerging markets don’t normally pay high dividends. When we checked BMO web site about this ETF, the fact sheet says the dividend yield for this ETF is only 1.70%. It looks like Globe Investor has the wrong data here.

We don’t recommend buying any long-term bonds right now, such as iShares Canadian Long Bond ETF. There have been rumours that Bank of Canada will hike interest rates soon.

Also note that iShares has just released a couple of new ETFs recently. There is no dividend distribution history for them yet. I believe a few of them, such as iShares US High Yield Bond, has the potential to be in the list above.

Update (19-Feb-2010): The data are coming from GlobeInvestor.com web site as of the date of this posting. There might be differences as the stock prices move up/down or because of dividend raise/cut.