Generating a steady stream of monthly income is one of the main reasons many Canadians open a Tax-Free Savings Account (TFSA).
Any income earned inside the account, whether it comes from dividends, interest, or capital gains, is completely tax free. That means every dollar you receive can either be reinvested or withdrawn without worrying about the Canada Revenue Agency.
Calculating monthly income becomes especially easy when the investment has a fixed distribution. And few Canadian investments do this more consistently than Canoe EIT Income Fund (TSX:EIT.UN).
Each unit of EIT.UN pays $0.10 per month, like clockwork. Because the distribution amount is fixed, figuring out how much you need to invest to reach a target income becomes simple math.
Here is how it works if your goal is to generate $500 per month inside a TFSA.
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What is EIT.UN?
EIT.UN holds an actively managed portfolio of dividend-paying companies, primarily from Canada and the United States. The underlying holdings span several sectors, including financials, energy, industrials, and utilities.
Unlike many ETFs that simply track an index, EIT.UN is actively managed. The portfolio managers adjust holdings and sector allocations to maintain the income stream and capture opportunities across the market.
Another feature of the strategy is moderate leverage. The fund is allowed to borrow capital to increase its exposure to income-producing assets. This can boost distributions during strong markets, but it also adds risk during downturns.
As of March 11, the units closed at $16.62, while the fund’s net asset value sat slightly higher at $16.77. That means the fund was trading at a small discount to the value of its underlying holdings.
The distribution schedule is also very consistent. The most recent ex-dividend date is March 20, 2026, with the next payment scheduled for April 15, 2026. This pattern repeats each month.
How many shares you need for $500 per month
Because EIT.UN pays $0.10 per unit every month, calculating the required investment is straightforward.
To generate $500 per month, you would need: $500 ÷ $0.10 = 5,000 units.
At the current market price of $16.62, purchasing 5,000 units would cost approximately: 5,000 × $16.62 = $83,100.
Held inside a TFSA, the full $500 monthly payment would be tax free. You could reinvest it to compound your portfolio or withdraw it to cover living expenses.
Of course, it is important to remember that while the distribution amount has historically been stable, the market price of the units can still fluctuate based on market conditions.
EIT.UN is best viewed as an income-focused investment first, with capital appreciation as a secondary goal.
