Are you a Canadian looking to earn a reliable passive-income stream every month during the second half of 2024 and beyond? A multi-asset exchange-traded fund (ETF), iShares Canadian Financial Monthly Income ETF (TSX:FIE), offers an attractive opportunity for a lifetime of high-yield monthly dividend streams. It boasts a high annual dividend yield of 6.6% and provides a stable and diversified income stream each month.
Letâs explore why the FIE ETF is a solid low-cost choice for income-oriented investors and how it could help you make $250 a month in passive income.
A high-yield monthly dividend ETF to buy for passive income
iShares Canadian Financial Monthly Income ETF is a moderate-risk rated passive-income-generating fund that invests in regular cash flow-generating assets, including preferred shares, corporate bonds, and dividend-paying stocks within the financial services sector. It seeks to maximize total return and provide a stable stream of monthly cash distributions. The ETF has excelled in its mandate since its inception in 2010 and generated a compound annual total return of 7.2% per annum. It could do better in 2024, given its 9.2% total return year to date.
Why invest?
Canadians are falling in love with the monthly dividend-paying ETF this year. Passive-income-seeking investors keep adding more capital to the fund, and its net assets have grown from around $980 million in February this year to more than $1 billion at the time of writing. But what makes it so appealing?
Beyond the 6.6% dividend yield and a high payout frequency (monthly), iShares Canadian Financial Monthly Income ETF offers the diversification necessary to reduce total risk on an investment without sacrificing yields. It has a reasonably low management fee and can be held as a core position in a registered retirement portfolio.
The fundâs wide diversification is seen in its 20.2% allocation to preferred stocks (a sub-asset class of stocks best known for its relative price stability and stable dividend payouts) and a 9.9% allocation to corporate bonds that produce contractual fixed income streams while the rest of its capital is deployed into financial sector stocks including banks, insurance, financial services stocks that pay regular dividends. The financial sector is best known for stable dividend stocks, and they seldom disappoint — generally.
Most noteworthy, iShares Canadian Financial Monthly Income ETF is a low-cost investment that incurs a management expense ratio (MER) of 0.8. Investors pay as little as $8 annually for every $1,000 invested. Directly investing in the preferred shares and corporate bonds could require active portfolio management and cost investors much more than 0.8% in annual investment expenses. The ETF minimizes value losses.
Whatâs more, the passive-income investment is eligible for inclusion in your registered accounts to gain a layer of added efficiency as investors build retirement nest eggs that can withstand market shocks.
How to make $250 per month in passive income
To generate $250 a month in passive income from the ETF, investors could buy 6,250 shares, as shown in the table below.
Investment Fund
Recent Price
Investment
Number of Shares
Dividend rate
Total Dividend
Frequency
Annual Dividend
iShares Canadian Financial Monthly Income ETF (TSX:FIE)
$7.29
$45,562.50
6,250
$0.04
$250.00
Monthly
$3,000.00
Remember, dividend reinvestment can compound the total rate of return on your investment over time. The ETF offers investors a distribution-reinvestment plan to effortlessly reinvest monthly dividends and accelerate the growth rate of their invested capital.
FIE data by YCharts
A $45,000 investment in the iShares Canadian Financial Monthly Income ETF 10 years ago could have grown to more than $87,000 today.
The post Buy 6,250 Shares of This Top Dividend Stock for $250/Month in Passive Income appeared first on The Motley Fool Canada.
你是加拿大人吗?是否正在寻找可靠的被动收入来源,以在2024年下半年及以后的每个月都获得收益?iShares Canadian Financial Monthly Income ETF(TSX:FIE)是一种多资产交易所交易基金(ETF),为终身高收益月度股息流提供了有魅力的机会。ETF拥有高额的年度股息产量,达到6.6%,每月提供稳定和多样化的收入流。
iShares Canadian Financial Monthly Income ETF是一种评为中度风险的被动收入产生基金,投资于产生定期现金流的资产,包括首选股、公司债券和金融服务部门内的有股息的股票。它旨在最大化总回报并提供稳定的月度现金分配。ETF自2010年成立以来,在其任务上表现出色,并产生了7.2%的年复合总回报率。考虑到该ETF在今年截至日期的9.2%总回报率,它在2024年可能做得更好。
尤其重要的是,iShares Canadian Financial Monthly Income ETF是一种低成本投资,其管理费用比率(MER)为0.8。投资者每1000加元投资仅需支付8加元。直接投资优先股和公司债券可能需要积极的投资组合管理,并且会比年度投资费用高达0.8%。ETF最大程度地减少了价值损失。