What HMAX costs you in tax.
Most funds are taxed as if every dollar were income. HMAX is not — 83% of its 2025 distributions were return of capital, which is not taxed the year you receive it.
Combined federal and provincial marginal rates for 2026, applied to HMAX's published 2025 tax character. Not tax advice — see the disclaimer.
Where the tax comes from
| Component | Share | Amount | Rate | Tax |
|---|---|---|---|---|
| Return of capital | 83.1% | $9,107 | — | $0 |
| Eligible dividends | 16.9% | $1,852 | 6.4% | $118 |
| Capital gains | 0.0% | $0 | 14.8% | $0 |
| Foreign income | 0.0% | $0 | 29.6% | $0 |
| Other income | 0.0% | $0 | 29.6% | $0 |
The same holding, three accounts
Nothing is taxed, so the return-of-capital advantage is worth nothing here — it was not going to be taxed anyway.
Nothing taxed while it stays inside. Every dollar withdrawn later is taxed as ordinary income, at whatever your rate is then.
The only account where character matters — and where you must track the cost base that return of capital keeps moving.
What this assumes
That next year looks like the last published one. A fund's tax character is only known after year end — HMAX's most recent published breakdown is 2025. The split above is that year's, applied to what the fund pays now. It will not be exactly right, and the direction it is wrong in is not predictable.
That the distribution rate holds. Monthly payments are declared per cycle. Every change HMAX has made is listed, and there have been several.
That this is your marginal dollar. The distribution is taxed on top of the income you entered, and a large enough distribution pushes you into the next bracket — this applies one rate to the whole amount rather than splitting it across brackets.
And it ignores the clawback. Eligible dividends are grossed up by 38% inside your net income even though the credit offsets the tax, which can reduce Old Age Security and other income-tested benefits. Why that catches retirees.
It is a good estimate of order and magnitude, and it is not tax advice. Anything with real money on it deserves an accountant.
Track the cost base, not just the income.
Return of capital moves your adjusted cost base every month. Import your trades and it is carried for you, per holding and per account.