RE:Div payment questions here is a column by gordon pape who invests in this fund as a dividend investor with a focus on income. he recommended this as a one of few close ended funds in TSX. here's his february 13 statement on this fund. See last paragraph as it's very reflective on what we're facing with lower share price with Cov19 era. Keep in mind canoe did provide recent update on their site back in Apr/May and declared this dividend safe during cov19 update. This fund utilizes captial gains to help pay for the dividend in theory.....
Canoe EIT Income Fund (T
SX: EIT.UN)
Type: Closed-end fund
Current price: $10.75 Originally recommended: Jan. 31/19 at $10.95 Annual payout: $1.20 Yield: 11.2% Risk: Moderate Website: www.canoefinancial.com
Comments: This is one of Canada’s largest closed-end funds, with assets under management of about $1.3 billion. The fund was launched in August 1997 and invests in a portfolio of blue-chip, dividend growth stocks, of which 39.9% are in Canada, 38.3% in the U.S., and 9.5% overseas. Cash assets account for 12.1% of the holdings. Top positions include Berkshire Hathaway, Canadian Natural Resources, Brookfield Asset Management, Medtronic plc, and Coca-Cola.
The fund distributes $0.10 per month, for a yield of 11.2% at the current price. Given the nature of the portfolio and the high cash position, that does not appear to be sustainable. However, the payout has remained consistent for the past decade and the unit price has stayed in a narrow range of $10-$12 for most of the past three years.
The distributions are tax-friendly. The figures for 2019 are not out yet but for 2018 capital gains comprised 48.7% of the payout, return of capital was 46.6%, and eligible dividends comprised 4.7%. These units are suitable for non-registered accounts.
The current net asset value of the units is $10.97 so it is trading at a discount of 2%.
Action now: Buy for the high yield, with the understanding that we could see a decline in the trading price if stocks go into a slump.