TFSA Investors: This ETF Is Yielding 3.2% And has Been Soaring This Year

The stock market can be a volatile place for investors, and finding stability is often a top priority for those looking to protect their hard-earned capital. If you have a tax-free savings account (TFSA) and want to add a reliable stream of passive income to your portfolio this year, an excellent exchange-traded fund to consider is the Invesco Canadian Dividend Index ETF (TSX:PDC).

This fund is an attractive option for Canadian investors because it focuses on companies with a history of stable or growing payouts. Currently, the ETF yields a compelling 3.2%, offering a solid income stream in a market where finding a good yield can be challenging. What makes this fund particularly appealing right now is its performance. The Invesco Canadian Dividend Index ETF is up a remarkable 24% year to date, demonstrating an impressive balance of both capital appreciation and income generation.

Holding this fund inside a TFSA is a highly strategic move for income-focused investors. Since a TFSA shields your investments from taxes, every dollar you earn from the fund's 3.2% yield is completely tax-free. You can seamlessly reinvest those dividends to take advantage of compound growth or withdraw the cash to cover your living expenses without worrying about a tax bill at the end of the year.

With economic uncertainty still lingering on, prioritizing investments that offer a blend of dividend income and capital protection is essential. By adding the Invesco Canadian Dividend Index ETF to your TFSA, you can build a resilient portfolio that steadily generates wealth over the long haul, regardless of market volatility.