Most dividend-paying stocks set their payouts on an annual basis. That usually means you get the same amount each quarter for the year. If the company performs well, the board might approve a raise for the next year—but cuts can happen, too.
Dividend exchange-traded funds (ETFs) are a bit different. They collect dividends from dozens of underlying stocks and then pass them on to you, usually monthly or quarterly. However, because those dividends vary, ETF payouts tend to fluctuate quite a bit.
One standout that doesn’t behave this way is a closed-end fund (CEF) like Canoe EIT Income Fund (TSX:EIT.UN).
Unlike ETFs, EIT.UN follows a managed distribution policy, meaning it aims to pay a fixed monthly amount no matter what the market is doing. Right now, that’s $0.10 per share, paid every month—like clockwork.
Here’s how EIT.UN works and how much tax-free income you could generate with a $14,000 TFSA investment.
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How EIT.UN works
Over the past 10 years, EIT.UN has delivered an impressive 11.65% annualized return, assuming you reinvested the distributions. While it’s designed primarily as an income fund, the growth side hasn’t disappointed either.
EIT.UN also uses up to 20% leverage, which can help amplify both returns and yield when markets are rising—but it also increases risk when markets fall. This leverage, combined with active management, gives the fund more flexibility to pursue opportunities across both U.S. and Canadian markets.
Speaking of which, EIT.UN doesn’t track an index. It’s an actively managed portfolio made up of roughly 50/50 U.S. and Canadian quality stocks, handpicked by Canoe’s investment team.
One unique feature of the fund is that it often trades at a slight premium or discount to its net asset value (NAV). As of April 17, 2025, EIT.UN had a closing price of $15.02 and a NAV of $14.95, meaning it was trading at a small premium.
The hallmark of EIT.UN is its fixed monthly distribution of $0.10 per share, paid reliably each month. To qualify for the payout, you must own shares before the ex-dividend date, which typically falls around the 14th or 15th of each month. Payments are usually deposited around the 24th or 25th of the following month.
Technically, the distribution isn’t all dividend income. It can include eligible dividends, capital gains, and return of capital (ROC). That’s why holding EIT.UN in a TFSA is ideal—it keeps all of the income completely tax-free, no matter how it’s classified.
How much passive income could you generate?
If you invest $14,000 in EIT.UN, and the current share price is $14.95, that gives you approximately 936 shares. Each of those shares pays $0.10 per month, so 936 shares × $0.10 = $93.60 per month in tax-free income. And because this is inside a TFSA, there’s no tax to deduct—what gets paid out is yours to keep. It’s as simple as that.
If you choose to reinvest your monthly distribution, that $93.60 can go right back into buying more shares of EIT.UN. The next month, those additional shares earn you even more income, which can then be reinvested again. And just like that, the snowball starts rolling. Month after month, your position grows, and so does your passive income—all compounding tax-free inside your TFSA.
