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One strategy for choosing exchange-traded funds is to simply go for the cheapest option in its category.

This will often lead you to the biggest, most liquid ETFs, which tend to be a good thought for the long-term investor who wants cheap access to benchmark stock and bond indexes. But sometimes, you'll miss out on worthy funds that have virtues beyond low costs. An example is the PowerShares Canadian Dividend Index ETF (PDC).

Some investors use dividend ETFs for exposure to the Canadian stock market instead of broad-based equity ETFs that include non-dividend stocks. This strategy may not stand up well to a stronger economy where interest rates are rising and investors are chasing the fastest-growing stocks, but never mind that for now. If you want a dividend ETF, you'll want to get the best balance of the following attributes:

- Low cost: The less you pay, the more you keep.

- Liquidity: You want an actively traded fund with a tight bid-ask spread so you can buy and sell at market prices.

-Yield: With interest rates as low as they are, there's intense interest in dividend income

- Total returns: Even income-focused investors want to grow their money.

- Diversification: Financial stocks dominate the dividend world, but your portfolio may already have plenty of exposure to this sector.

PDC's management expense ratio is 0.55 per cent, which is roughly average. The Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY-T) is the bargain player in this category, with an MER of 0.22 per cent. PDC is smallish, with assets of about $75-million, and the average daily trading volume over the past 30 days is about 7,000 shares. It's middling at best on liquidity, but this shouldn't matter much if you plan to hold for the long term.

Where PDC scores well is in providing a blend of returns, yield and diversification. Exposure to financials is reasonable for the dividend fund category at about 40 per cent. VDY, the low cost leader, has a 62-per-cent weighting to financials. PDC's yield was a bit below 4 per cent in late September, which puts it firmly in the upper half of its category. The total return for the past 12 months was 15.5 per cent, which was comparatively strong. Not a lot of dividend ETFs have a five-year record, but PDC does. The total return over that period was an average annual 10.2 per cent, which was among the best in the category.

PDC isn't the perfect dividend ETF, but it's worth some further research. You might overlook it if you focus only on cost.