CBD or CDZ for non-registered account

"Canadian dividends are relatively tax-efficient." It depends on which tax bracket you are in. Look up the marginal tax for each type of income for each tax bracket.

IMO you are putting too much emphasis on tax. Don't let the tax tail wag the investment dog.

Point taken.

What do you guys think of the BMO or RBC monthly income funds?

Funny, from reading Leslie's comment I had a whole different take on the phrase "Don't let the tax tail wag the investment dog".

While tax efficiency is important in a non-registered account, I think the investments you choose should fit your carefully planned asset allocation.

If your asset allocation for this account is 100% equity, which you implied in your first post, then a monthly income fund doesn't seem to fit your allocation, regardless of whether or not it is tax efficient (these likely hold approx 50% in bonds). On the other hand, a Dividend fund matches the allocation, and they are usually managed to be tax efficient, but you'll want to research this before you buy.

The important thing is to carefully plan your asset allocation (for example, if your time horizon is only a couple of years, then you probably don't want to have high exposure to equities!). Once you have done that, you can pick invesments that fit the allocation and will also be tax efficient.