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iShares Diversified Monthly Income ETF (XTR $11.38)
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iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ $37.92)
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PIMCO Monthly Income Fund (Canada) (PMIF $18.02)
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Global X S&P/TSX 60 Covered Call ETF (CNCC $12.63)
I currently hold a large position in Whitecap Resources (WCP), which pays a consistent monthly dividend. While I enjoy the steady income, the position has grown too large and is throwing my portfolio out of balance. I’m also increasingly concerned about the company-specific risk, especially being concentrated in the Oil & Gas sector.
I’m looking for a safer alternative that still provides monthly income — ideally a dividend-focused ETF with a yield reasonably comparable to Whitecap, but with better diversification and lower volatility.
Are there any dividend ETFs or other options you would recommend for reliable monthly income without being overly tied to one sector?
Thanks in advance for your guidance!
It may be hard to match WCP's 7.70% dividend in a monthly-pay diversified fund without moving to a covered call or enhanced ETF. The total return may match, or exceed, that rate, but the yield may not for a straight equity fund. XTR, for example, is nicely diversified, but yields 4.22%. CDZ yields 4.07% (but five-year annualized return is 15.35%). PMIF is getting closer at 5.02%, but longer term performance is worse (5 year 3.47%). An enhanced covered call fund such as HDIV easily hits the yield requirement (11.43%) but does use 25% leverage, and some of the income will be considered return of capital (not necessarily a bad thing, depending on the account). CNCC may work: no leverage, yield 8.57%, five-year 12.91%, and diversified (TSX 60 benchmark).