TD Active Global Enhanced Dividend ETF (TGED:CA): A Steady Beacon in Volatile Markets?

Investors seeking reliable income streams in a choppy market environment may want to take note of the TD Active Global Enhanced Dividend ETF (TGED:CA). The fund has emerged as a standout performer in 2025, leveraging a strategy of strategic dividend growth to attract income-focused investors. With a 30% year-over-year (YoY) dividend increase since 2023 and recent quarterly hikes that boosted payouts from CAD 0.068 to CAD 0.091, TGED is positioning itself as a high-yield alternative in a landscape where stability is scarce.

But how sustainable is this growth, and what risks lurk beneath the surface? Let's dig into the numbers.

The Dividend Surge: A Strategic Play for Income Investors

The ETF's recent moves are striking. As of early 2025, TGED increased its quarterly dividend from CAD 0.068 to CAD 0.091—a 33.8% jump—marking the latest in a series of consistent hikes since 2023. This growth trajectory aligns with the fund's mandate to prioritize companies with strong dividend growth potential, particularly in sectors like energy, utilities, and telecommunications.

The fund's current yield of 4.6% (as of June 2025) stands out in a world where bond yields remain depressed and equity markets oscillate between optimism and fear. For retirees or those relying on portfolio income, this makes TGED a compelling option—especially compared to broad market indices like the S&P/TSX Composite, which has struggled to deliver consistent dividend growth amid sector volatility.

The Case for Stability: Diversification and Active Management

TGED's global diversification is a key selling point. The fund holds over 100 companies across 20+ countries, reducing reliance on any single market or currency. This strategy has insulated it from regional downturns, such as the energy sector's recent soft patch in North America, while capitalizing on opportunities in Europe and Asia.

Moreover, its active management approach—led by TD Asset Management's dividend-focused team—differentiates it from passive ETFs. The fund selectively targets firms with sustainable payout ratios and strong balance sheets, avoiding over-leveraged companies prone to dividend cuts during recessions.

This discipline has paid off: even as equities faced headwinds in early 2025, TGED's dividend growth remained intact. The CAD 0.091 quarterly payout, maintained through Q2 2025, signals confidence in the underlying portfolio's health.

Risks to Consider: Fees and Equity Sensitivity

No investment is without drawbacks. TGED's management expense ratio (MER) of 0.52% is relatively high for an ETF, eating into returns over time. Passive index funds often charge half this fee, so investors must weigh the cost of active management against the benefits of dividend stability.

Additionally, TGED is equity-sensitive, meaning it will underperform in bear markets. A prolonged downturn in global stocks could pressure both its price and dividends. The fund's 3.61% yield (as of June 20) is also slightly lower than its peak earlier this year, a reminder that dividends aren't immune to market cycles.

Why TGED Still Makes Sense for Income Seekers

Despite these risks, TGED's track record of consistent dividend hikes since 2023 is hard to ignore. For investors prioritizing rising income streams over capital appreciation, the fund offers a clear path to growing cash flow. Its 4.6% yield isn't just about today—it's about the potential for future increases as the portfolio matures.

Consider this: while many income-focused ETFs are stuck in a low-yield rut, TGED's active strategy has enabled it to outpace peers like the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ.UN), which yields around 3.2%.

Final Take: A Solid Bet for Income Investors

TGED:CA isn't a get-rich-quick scheme. It's a patient investor's tool, designed to deliver steady income growth in exchange for accepting moderate fees and equity market risk. For those willing to accept those trade-offs—particularly retirees or income-focused allocators—TGED's combination of diversification, active management, and dividend discipline makes it a standout option in 2025.

Recommendation: Consider a core satellite allocation to TGED as part of a diversified income portfolio. Pair it with lower-risk fixed-income instruments to offset equity volatility. Monitor its dividend growth closely, but don't expect miracles—this is a fund built for the long haul, not a short-term trade.

In a world where stability is rare, TGED is proving that dividend growth can still thrive—if you know where to look.