It’s easy to justify hanging onto a cash equivalent investment product when you’re getting virtually risk-free returns of close to 5 per cent or more.
“As rates go lower, that’s when you’re going to see dividend ETFs and dividend companies come back,” said Naseem Husain, senior vice-president and ETF strategist at Global X, formerly Horizons ETFs. “There are going to be more nuanced conversations.” Some dividend stocks have participated fully in the stock market rally of the past while, but a raft of stalwart names have remained in the penalty box. While the S&P/TSX composite index was up 6.5 per cent for the year through May on a total return basis, the S&P/TSX Canadian Dividend Aristocrats Index was up 1.9 per cent. Among the stocks in this index are Enbridge Inc. (Bonds are another buy-low option for money in cash equivalent ETFs right now.