How can you set up a portfolio that pays you cash income every month?
It might be tempting to think you need to pick assets that have monthly payout schedules, such as real estate investment trusts (REITs) and some smaller pipeline companies.
In fact, you can get dividend income coming into your portfolio every single month with or without monthly pay stocks. Different stocks pay on different schedules, so you can get monthly income with a diverse enough collection of quarterly-paying stocks, too.
With that in mind, here are five securities—three stocks and two funds—that collectively pay me a bit of passive income every month.
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TD Bank
Toronto-Dominion Bank (TSX: TD) is a Canadian bank stock that pays its dividend every January, April, July, and October. It currently has a 2.65% dividend yield, among the lowest it has had in recent history. I got a higher yield on this stock when I bought it in December of 2024: the company was going through some legal issues in the U.S. at that time. It has performed better than expected since then. Today, I have a pretty high yield on cost on my TD shares, but those buying fresh shares today would not get much of a yield. I just think of it as a hold now, and I sold a portion of my position recently. Nevertheless, TD remains a major part of where my portfolio income is coming from.
Brookfield Asset Management
Brookfield Asset Management (TSX: BAM) is a Canadian non-bank financial stock that pays every March, July, September, and December. It has a 3.85% yield today, which is considerably higher than TD’s. Unlike with TD, I’ve actively been considering adding more BAM stock to my portfolio lately. The company has been growing quite a bit recently and has been raising a lot of investor capital with which to fuel still more growth. So, while already being in my portfolio, BAM is very much on my radar as a stock to buy.
Postal Savings Bank of China
Postal Savings Bank of China (OTC: PSTV.Y) is currently the highest-yielding stock in my portfolio. It has a 5.55% dividend yield, paid out every March and September. The company has a conservative loan profile, with little of the troubled property loans that have been plaguing Chinese banks in its portfolio. It heavily invests in small business and rural development loans—both major growth areas in China. Finally, as a Chinese company, Postal Savings Bank’s withholding tax (10%) is less than what you see with most other international market stocks.
iShares S&P/TSX 60 Index Fund
Turning now to exchange-traded funds (ETFs), we have iShares S&P/TSX 60 Index Fund (TSX: XIU). This is a fund that covers the TSX 60, an S&P Global index of the 60 largest publicly traded companies in Canada. It pays dividends every February, May, August, and November. The fund holds about 60 stocks, which is a decent amount of diversification. It has relatively low fees—a 0.15% management fee and a 0.16% total expense ratio. Finally, the fund is one of the most liquid and widely traded in Canada, which gives it a narrow bid-ask spread. Though I sold a small percentage of my XIU shares recently, the fund remains one of my longest-standing portfolio holdings.
All-world ex-US
Finally, we have Vanguard FTSE All-World Ex-US ETF (TSX:VEU). It’s a fund that covers all non-U.S. markets. With thousands of stocks, its diversification is surpassed only by a true all-world fund. Its 0.04% management fee is among the lowest in the business. And finally, much like XIU, VEU has high trading volume and a low bid-ask spread. Overall, it’s a fund worth considering for any passive-income portfolio.
