Here is my take, right up front. If you want a steady paycheque from your investments, and you trust Canada’s big banks to keep doing what they do best, the iShares Canadian Financial Monthly Income ETF (TSX:FIE) deserves a spot in your portfolio.
The exchange-traded fund (ETF) yields roughly 4.4% annually, it sends you cash every month, and it just posted a monster year.
I have spent years watching investors chase complicated income products. However, FIE is refreshingly simple. You buy one ticker, and you own a basket of Canada’s strongest financial companies, plus a slug of preferred shares and corporate bonds. Then the cheques start landing in your account every month.
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Why Canada’s banks are the bedrock of income investing
Canada’s financial sector is among the most reliable globally. A handful of banking giants dominate the market, which keeps competition sane and profits steady. Most of these banking behemoths have paid dividends through recessions, oil crashes, and a pandemic.
That stability is a key reason to invest in the FIE ETF. The dividend fund is run by BlackRock under the iShares brand and has been around since April 2010. In the last decade, the FIE ETF has returned over 200% to shareholders, after adjusting for dividends.
The dividend ETF manages $1.4 billion and holds 26 positions. Canadian banks account for 45% of the fund, followed by insurance companies at 29%. The top holdings include Royal Bank of Canada, CIBC, Toronto Dominion, Manulife, and National Bank.
A deeper dive into the Canadian dividend ETF
The fund pays $0.04 per unit each month. At a recent price near $10.86, that works out to a distribution yield of roughly 4.4%, similar to its 12-month trailing yield.
It means that an investment of $10,000 in the FIE ETF will help you earn $442 per year, or roughly $37 per month.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| FIE ETF | $10.86 | 921 | $0.04 | $36.84 | $442 |
FIE has returned 31.5% over the past year, 25.5% annually over the last three years, and 13% annually over the last five years.
A hypothetical $10,000 invested at the fund’s 2010 launch would have grown to about $43,757 by the spring of 2026. That is the power of compounding bank profits as you collect income along the way.
FIE charges a management expense ratio of 0.74%, making it pricier than most passive index funds. Basically, you are paying for the income focus and the active blend of stocks, preferred shares, and bonds.
Over the long run, FIE has trailed the broad S&P/TSX Capped Financials Index, which returned 14.6% a year over a decade versus 11.7% for the fund. The preferred shares and bonds smooth the ride, but they also cap some upside when bank stocks are roaring.
For most income investors, that trade is worth the lower volatility. You give up a little growth in exchange for calmer, more predictable monthly cash.
The bottom line on the FIE ETF
I think FIE is a buy for Canadians who want a dependable monthly income and broad exposure to the country’s financial sector, without the headache of choosing individual bank stocks.
If you are building a portfolio that pays you to wait, this is one income idea you really can take to the bank.
