We are very happy to announce the arrival of Cannon Asset Managers's Tax Free Savings managed portfolios (Bundles). Cannon Asset Managers have provided us with some great TFSA insights and we are super amped to share this info with you! Not only is Cannon a valued partner, but our collective core strategy is for all South Africans to invest. See here why tax free savings is the absolute bees knees!
What is a TFSA?
Tax-Free Savings Accounts, also called TFSAs, were introduced in South Africa in 2015 to promote saving and investing for all South Africans.
How does a TFSA work?
- You can invest up to R33,000 per tax year
- You can invest up to R500,000 in your lifetime
What are the benefits of a TFSA?
- It’s tax free: you pay no tax on income or capital growth in TFSAs
- It’s affordable: the costs of the investment, known as the effective annual costs (EACs), are modest
- It’s flexible: you can make regular monthly contributions or invest when it suits you
- It’s accessible: 100% of your capital is available always; there are no limits on how much of your investment you can access, unlike with a retirement annuity (RA)
Why Cannon Asset Managers’ TFSA bundles via EasyEquities?
- It’s user-friendly: you can invest via EasyEquities, with no minimum investment amount required
- It’s cost-effective: the total investment cost is less than 1% per annum across all four of our TFSA bundles
- It’s easy-to-access: your investment can be available within 24 hours
- Our multi-asset, factor-based TFSA bundles offer powerful investment solutions
Our portfolio managers build each bundle’s blend of assets to reduce the concentration risks associated with traditional passive and index funds whilst making sure that each bundle is made up of a well-diversified basket of assets.
Each investment bundle holds a tailored blend of indexes – Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs) – that own or mimic the performance of companies, property assets, bonds, commodities and cash in different sectors and regions, held in carefully selected weightings, to best meet the objectives of each bundle.
In this way, Cannon Asset Managers’ TFSA bundles are designed to meet the investment needs, time horizons and risk appetites of different investors. The four TFSA bundles include:
Capital Preservation Bundle (CPI +2%): Medium-term, conservative investment that aims to protect the rand value of capital against capital loss and to protect the real value of assets
Balanced Growth Bundle (CPI +4%): Steady, long-term wealth creation through balancing income generation, capital growth and market risk
Assertive Growth Bundle (CPI +5%): Longer-term, more aggressive investment that seeks the kind of high capital growth associated with short-term market volatility
Global Growth Bundle (CPI +6%): Aggressive offshore investment that aims for high capital growth in hard currencies over the long term
What are the T’s and C’s of TFSA’s?
- Anything over and above the annual or lifetime limits will be taxed at 40% in that tax year
- Any withdrawals you make will count towards your annual and lifetime limit
- You can have more than one TFSA account, but you are restricted to the same limits, collectively, across all your accounts (R33,000 per tax year and up to R500,00 in your lifetime)
- You can open a TFSA in the name of a dependent, such as your child, but you will be making use of their tax-free allowance, which could limit their ability to save in a TFSA later on
Until Next Time