Another Great ETF for Your TFSA Account
If you’re someone who likes to play it safe but still wants solid returns, there’s a great ETF you should consider adding to your TFSA — especially if you trust the strength of Canada’s banking system.
The ETF I’m talking about is HCAL — the Hamilton Enhanced Canadian Bank ETF. It gives you equal-weight exposure to Canada’s “Big Six” banks, with a modest 25% cash leverage. That extra boost helps increase both dividend yield and long-term performance.
As of now, HCAL is offering an annual dividend yield of 6.42%, paid out monthly. So if you’re looking for consistent monthly income along with the potential for long-term growth, this ETF checks both boxes.
Since HCAL holds major Canadian banks and adds a bit of leverage, its value generally rises along with the share prices of those banks. Canadian banks are known for their stability and resilience — even during global financial downturns — which makes this ETF an attractive long-term hold.
Why consider HCAL in your TFSA?
- Monthly dividend payments mean you can rely on a regular income stream.
- Dividends are eligible for reinvestment, which means you can automatically buy more units and benefit from compound growth over time.
- Tax-free growth inside your TFSA makes the returns even more attractive.
- Managed by Hamilton ETFs, a firm focused on financial-sector ETFs.
How much should you invest?
You don’t need to go all in. A simple and safe way to start is by investing 5% to 10% of your TFSA into HCAL. For example, if your TFSA contribution limit is $7,000 in 2025, that’s about $580 per month. You could begin by contributing $30 to $50 each month into HCAL — and consider increasing your investment during market corrections to maximize long-term gains.
Where can you buy HCAL?
Wondering how to invest in this ETF? The good news is, HCAL is available on most Canadian brokerage platforms, including Wealthsimple, Questrade, RBC Direct Investing, and many more. It’s as simple as searching the ticker HCAL.TO and placing a buy order — just like you would for any stock.
Final thoughts
HCAL isn’t for everyone, but if you’re looking for monthly income, exposure to Canada’s strongest banks, and long-term compounding potential, it’s definitely worth a look. With the added benefit of tax-free growth in your TFSA, it’s a smart way to earn passive income while growing your investment over time.
