BMO’s ZHP ETF: A Steady $0.09 Monthly Dividend Machine for Canadian Investors

Investors craving steady income and protection from currency swings take note: The BMO US Preferred Share Hedged to CAD Index ETF (ZHP.TO) is delivering a predictable CAD 0.09 monthly dividend in 2025, backed by a disciplined distribution schedule and smart hedging strategies. Let’s dive into why this ETF could be a cornerstone of your income portfolio—and how to play it.

The Dividend Machine: Monthly Cash Flow with Hedging Muscle

The ZHP ETF isn’t just another dividend player. It’s a monthly pay machine designed for Canadian investors seeking income while shielding against USD volatility. In 2025, it’s distributed CAD 0.09 per share every month, with payment dates falling on or around the 4th of each month (e.g., March 4, April 2, May 2). This consistency isn’t an accident:

• Ex-Dividend Dates: Always fall on the 27th or 28th of the prior month, giving investors a clear window to lock in shares (e.g., hold by Feb 27 to get March’s dividend).
• Tax Advantage: All dividends are classified as “eligible” under Canadian tax law, supercharging the after-tax yield.

Why Monthly Matters: Outpacing Quarterly Alternatives

While many ETFs pay quarterly, ZHP’s monthly cadence offers liquidity and predictability. Let’s crunch the numbers:
- Annualized Yield: At CAD 0.09/month, that’s $1.08 annually per share, or a 1.2% yield (assuming a $90 share price).
- Currency Hedge: The ETF’s CAD hedging neutralizes USD fluctuations. In a rising USD environment, this protects your principal while delivering steady payouts.

The Playbook: Own It Before the Ex-Date

To snag those $0.09 payments, timing is key. For example:
- March 2025 Dividend: Buy shares before Feb 27 (ex-date). The $0.09 drops into your account by March 4.
- April 2025 Dividend: Own shares by March 28.

This recurring rhythm makes ZHP ideal for income-focused portfolios, especially retirees or investors chasing tax-advantaged cash flow.

Risks? Yes—but Manageable

No investment is risk-free. Here’s what to watch:
1. Interest Rate Sensitivity: Preferred shares can drop in value when rates rise.
2. Hedging Costs: The CAD hedge adds expenses, which could trim returns in strong USD environments.

But here’s the kicker: ZHP’s dividend has been stable since 2025 began, even as the Fed teeters on rate hikes. The ETF’s track record of lowering its payout from $0.097 in 2024 to $0.09 in 2025 suggests management is prioritizing sustainability over growth—a cautious move that bodes well for long-term reliability.

The Bottom Line: A Steady Hand in Volatile Markets

The BMO ZHP ETF isn’t flashy, but it’s a reliable income engine for Canadian investors. With its monthly payouts, tax perks, and currency hedging, it’s a must-own for dividend hunters looking to sidestep USD volatility.

Final Call: Buy ZHP before the next ex-date, hold for the recurring $0.09 payments, and sleep well knowing your income stream—and currency risk—are locked in. This ETF isn’t a get-rich-quick play, but it’s a foundation for steady growth in a shaky market.

Disclosure: Past performance doesn’t guarantee future results. Consult a financial advisor before investing.