Showdown: Which Monthly Income ETF Should You Choose?

Canada has several monthly income ETFs, each with a similar mandate. They seek to provide excellent income today while minimizing exposure to the ups and downs of the stock market. 

The BMO Monthly Income ETF (TSX:ZMI) is one such fund. It offers a 4.06% trailing yield with underlying holdings that consist of major BMO ETFs. Top holdings include bond ETFs and dividend ETFs, with an approximate 50/50 split between the two asset classes. ZMI has a management fee of 0.61%.

iShares has several ETFs designed to provide monthly income. The iShares Diversified Monthly Income ETF (TSX:XTR) has assets of more than $600 million. It pays investors a nickel per share each month, good enough for a 5.22% trailing yield. Its top holdings also consist of other iShares ETFs, with corporate bond ETFs and preferred share ETFs making up the top holdings.

XTR holds approximately 55% fixed income and 45% equities and has a management fee of 0.62%.

There’s also the iShares Global Monthly Dividend Index ETF (TSX:CYH). This has a trailing yield of just 2.9% while offering investors a diversified portfolio filled with global dividend-paying stocks.

Finally, we have the Purpose Monthly Income Fund (TSX:PIN). While this ETF is smaller than the others featured – with a market cap of just $35 million – it offers a yield of 5.04% and 123 underlying holdings.

Largest holdings include corporate and high-yield bonds, and it also uses options to generate more income. Its management expense ratio is approximately 0.6%.

Ultimately, for many investors it comes down to yield. The iShares Diversified Monthly Income ETF wins there with its 5.22% trailing yield.