If your goal is steady, predictable cash flow, keep it simple. You don’t need to juggle a dozen funds or chase headline yields. There’s one proven fund that already packages diversified equity exposure, an easy-to-plan monthly payout, and hands-off management.
For a tax-free savings account (TFSA) built around monthly income, I’d anchor it with the Canoe EIT Income Fund (TSX: EIT.UN).
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What EIT.UN is and how it works
EIT.UN is a closed-end fund listed on the TSX. Closed-end means the fund issues a fixed number of units that trade on the exchange like a stock, rather than creating or redeeming units daily like an ETF.
Because units trade in the market, they can sell at a premium or discount to the fund’s net asset value (NAV). At the time of writing, it’s trading at a small discount (for example, a ~$15.36 market price versus a ~$15.89 NAV in recent quotes). Aim to buy at a discount so you’re paying less than the underlying portfolio is worth.
The portfolio is bottom-up and actively managed. You’re getting roughly 40 large, liquid Canadian and U.S. stocks, with an approximate 50/50 split across the two markets. The manager can use up to about 1.2 times leverage. That modest use of borrowing is designed to enhance returns and support the fund’s distribution policy without taking the balance sheet to extremes.
The hallmark is the distribution. EIT.UN pays a very predictable $0.10 per unit each month. The payout is a mix of dividends, capital gains, and return of capital. For simplicity and tax efficiency, a TFSA is an ideal home. In a non-registered account, the return of capital portion reduces your adjusted cost base, which can complicate tracking.
Despite being income-oriented, performance has held up. With distributions reinvested, the 10-year annualized total return sits around 13.1%. That’s competitive and reflects the fund’s diversified holdings and disciplined distribution policy.
How much monthly income $50,000 can generate
The math is clean because the payout is a flat $0.10 per unit per month.
At a $15.39 unit price, $50,000 ÷ $15.39 ≈ 3,248 units.
Monthly cash flow ≈ 3,248 × $0.10 = $324.80.
Annual cash flow ≈ $324.80 × 12 = $3,897.60.
If you prefer to see the exact purchase math with whole units: 3,248 units would cost $49,986.72 at $15.39 and pay $324.80 per month, or $3,897.60 per year, deposited tax-free inside your TFSA.
To receive a given month’s payment, you must own units before the ex-dividend date. In October, for example, the ex-dividend date was October 22 with a payment date of November 14. Put next month’s ex-dividend date on your calendar and plan to be a holder of record before that date so you don’t miss the payout.
