Excessive month-to-month tax-free revenue can definitely occur in a Tax-Free Financial savings Account (TFSA). The account removes the tax drag that usually slows compounding. Should you construct a portfolio that throws off regular money and also you reinvest it, the snowball will get greater with out the Canada Income Company (CRA) taking a chew alongside the best way. The trick is scale and realism. A goal like $800 per 30 days sounds large, however it turns into math you’ll be able to plan round as soon as you realize the payout charge and also you settle for that larger yield normally comes with larger shifting elements.
Supply: Getty Photos
EIT
Canoe EIT Earnings Fund (TSX:EIT.UN) is a closed-end funding fund that goals to pay a gentle month-to-month distribution whereas additionally rising its internet asset worth over time. It doesn’t run one enterprise like a financial institution or a telecom. It holds a diversified portfolio of securities and makes use of energetic administration to attempt to generate revenue and good points. That construction issues as a result of your “month-to-month revenue” comes from the fund’s distribution coverage, not from one firm’s quarterly earnings.
The headline information during the last yr has stayed very income-investor pleasant: the fund saved its month-to-month distribution at $0.10 per unit, together with the not too long ago introduced February 2026 payout. It additionally introduced a particular non-cash distribution for unit-holders of document on Dec. 31, 2025. It acknowledged this was as a method to distribute residual internet realized capital good points and internet revenue not beforehand distributed, then reinvest and instantly consolidate models so there is no such thing as a bodily money cost.
Extra not too long ago, it additionally introduced a $300 million issuance of Collection 3 most popular models in a privately negotiated transaction, with closing anticipated in early February 2026, and it mentioned it meant to make use of proceeds in step with the fund’s goals and techniques. That form of transfer can matter because it adjustments the fund’s capital stack, financing prices, and adaptability, even when the month-to-month cheque stays the identical.
The numbers
The yield story seems to be engaging on the floor and it explains why EIT.UN will get a lot consideration in TFSA season. The annual dividend yield sits round 7.1% with the month-to-month frequency at $1.20 yearly. Simply do not forget that “month-to-month payout” just isn’t a hard and fast regulation of nature right here. The distribution can change, and your private yield adjustments day by day with the unit worth. Nonetheless, right here’s how a lot traders would wish to place in for $800 month-to-month, instantly.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| EIT.UN | $17.00 | 8000 | $1.20 | $9,600 | Month-to-month | $136,000 |
Right here is the half most individuals skip, and it’s the half you can not skip if you wish to maintain this for month-to-month revenue. The fund brazenly states that month-to-month distributions might embrace return of capital, which suggests a few of what you obtain might be your individual cash coming again to you slightly than pure revenue earned within the portfolio.
It additionally warns that return of capital that isn’t reinvested can scale back the fund’s internet asset worth and will scale back future revenue technology. That doesn’t make the fund “dangerous.” It merely means you must decide it by whole return, the online asset worth (NAV) development, and distribution sustainability, not simply the comforting feeling of a month-to-month deposit.
Backside line
So might this be a purchase for somebody chasing month-to-month tax-free revenue? It might, if the investor needs a one-ticket answer that targets a gentle month-to-month distribution, understands the closed-end fund construction, and feels snug monitoring whether or not the payout stays supported by means of completely different markets. It is also a “no” for anybody who needs easy dividend purity, because the fund’s personal disclosures make it clear that return of capital can play a job and that issues in case your aim is sturdy, self-funding revenue.