CI ONE Global Equity ETF (ONEQ.TO): Navigating Dividend Sustainability in a Volatile World

The CI ONE Global Equity ETF (ONEQ.TO) recently declared a CAD 0.1313 dividend per unit, payable on June 30, 2025, to unitholders of record as of June 24. This distribution, part of a long-standing dividend history stretching back to 2020, raises critical questions: Is ONEQ's yield sustainable? How does its global equity exposure align with current macroeconomic trends? And what risks must investors weigh before committing capital? Let's dissect these factors to determine whether ONEQ deserves a place in income-focused portfolios.

Dividend History: Volatility, Adaptation, and Recent Stability

ONEQ's dividend trajectory has been anything but linear. From 2020 to 2021, distributions surged dramatically—most notably a 34,566% increase in Q2 2021 (from $0.0003 to $0.104)—before settling into a more gradual pattern. However, recent years have seen declines: the 2024 June dividend dropped 31.58% year-over-year, while the forward yield as of June 2025 sits at 0.78%, a modest figure by equity ETF standards.

This chart reveals a pattern of adaptation. The 2021 spike likely reflects one-time capital gains distributions or rebalancing, while the post-2022 declines align with broader market headwinds (e.g., rising rates, geopolitical instability). The 2023–2025 consistency—steady distributions despite macro turbulence—suggests management is prioritizing sustainable payouts over chasing short-term gains.

Global Equity Exposure: A Shield Against Regional Volatility

ONEQ's mandate to invest in global equities offers a critical advantage in today's fragmented markets. Its portfolio spans developed and emerging markets, with sector allocations likely skewed toward defensive industries (e.g., consumer staples, healthcare) and tech leaders. This diversification buffers against region-specific risks:

• Geographic Mix: Likely 60%+ in North America, 20% in Europe, and 10–15% each in Asia-Pacific and emerging markets, based on typical global equity ETF allocations.
• Sector Balance: A tilt toward high-quality, dividend-paying firms in sectors like energy, industrials, and healthcare, which historically outperform during economic transitions.

This breakdown would reveal whether the ETF's geographic and sectoral exposures align with its stated global mandate. A well-scattered portfolio could mitigate the impact of, say, a U.S. recession or Chinese growth slowdown.

Macroeconomic Tailwinds and Risks

Supporting Factors:
1. Global Equity Valuations: Many markets trade at discounts relative to historical averages, offering entry points for long-term growth.
2. Interest Rate Environment: While the Fed's pause in hikes eases pressure on equity valuations, central banks in emerging markets (e.g., India, Brazil) are cutting rates, boosting local equities.
3. Dollar Weakness: A declining U.S. dollar could boost returns for U.S.-listed global ETFs, though ONEQ's CAD-denominated structure insulates Canadian investors from this effect.

Headwinds to Monitor:
- Currency Volatility: Exposure to non-Canadian equities carries currency risk, which the ETF may not hedge.
- Earnings Growth: If global corporate profits stagnate (as many analysts predict in 2025), dividend payouts could face pressure.
- Regulatory Shifts: Geopolitical fragmentation (e.g., trade wars, sanctions) could disrupt cross-border investments.

Management Strategy and Risks

CI Global Asset Management's approach to ONEQ is key. The firm's focus on quality over quantity—selecting companies with strong balance sheets and sustainable dividends—aligns with the ETF's recent yield stability. However, two risks loom large:

1. Liquidity Concerns: The note about ONEQ's ticker being “potentially outdated” raises red flags. While distributions continue, a delisting could disrupt trading and liquidity. Investors should confirm its TSX listing status before investing.
2. Expense Ratio Impact: The MER (Management Expense Ratio), while undisclosed in the data, could erode returns. A high fee on a low-yielding ETF (0.78%) reduces net income, especially in sideways markets.

Investment Thesis: A Hold for Long-Term Income Seekers

ONEQ's recent dividend declaration signals a commitment to stability, but its appeal hinges on strategic use:

• Buy for: Investors seeking modest, diversified equity income in a portfolio dominated by higher-yielding but riskier assets (e.g., REITs, preferred shares). The ETF's global reach offers inflation-hedging potential and geographic diversification.
• Avoid if: You demand high yields (e.g., 3–5%) or prefer active management in volatile sectors like tech or energy. ONEQ's 0.78% yield is a trade-off for broad diversification.

This comparison would assess whether ONEQ's returns justify its risk profile. Outperforming the MSCI World Index during downturns could validate its defensive tilt.

Final Take

The CI ONE Global Equity ETF is no get-rich-quick scheme. Its recent dividend declaration underscores a disciplined approach to payouts, but investors must acknowledge its limitations: a low yield, potential liquidity risks, and dependence on global macro conditions. However, in an era of heightened volatility, ONEQ's diversification and focus on quality equities position it as a foundation for income-focused portfolios, especially for those prioritizing capital preservation over aggressive growth. Allocate a portion—say 10–15% of your equity sleeve—and pair it with tactical hedges (e.g., inverse ETFs or cash reserves) to balance the ride.

Always consult the fund's latest prospectus and confirm its listing status before investing.