Vikash Shiba, an investment analyst at Rise EasyRetire, explores various investment options in 2024 that are suitable for a TFSA to help you make informed decisions and build a tax-free nest egg.
Rise EasyRetire is a pension fund administrator and asset manager that is a fully-owned subsidiary of EasyEquities. Rise EasyRetire currently manages assets in excess of R11.5bn, amongst its clients are local and foreign authorities, parastatals and the retirement funds of many South African leading companies.
While TFSAs are versatile, it's crucial to choose the right investment products to maximise the potential benefits.
The financial markets can be tricky to navigate, especially during uncertain times. The truth is, none of us have a crystal ball that can accurately predict where the market is heading, that is why it is crucial to ensure your TFSA is well diversified. A well-diversified TFSA portfolio is key to help mitigate risk, enhance potential returns, and safeguard your financial future during all market cycles
Before we dive into potential investment products for 2024, certain considerations needs to be made before making your investment:
Let’s now have a look at some of the potential investment products available for your TFSA for 2024:
Exchange Traded Funds (ETFs)
ETFs are an excellent option for TFSA investors seeking diversification at a lower cost. These funds pool investors' money to buy a diversified portfolio of assets such as stocks, bonds, income or commodities. ETFs offer flexibility, liquidity, and transparency. Below is a list of examples (not limited to) that an investor could explore for 2024:
Category |
Risk Tolerance |
Description |
ETF Examples |
SA Equity |
Aggressive |
These products provide broad based exposure to the overall SA stock market |
FNB Top40 Satrix SWIX Top 40 Satrix Capped All Share 1nvest SWIX 40 |
SA Equity Specialised/Sector |
Aggressive |
These products provide exposure to factor based strategies, thematic themes and sector specific indexes |
FNB MidCap Satrix Capped INDI Satrix FINI Satrix Equity Momentum Satrix Inclusion and Diversity Satrix DIVI Satrix Low Volatility Satrix RESI Satrix Quality |
SA Bonds |
Moderate |
These products provide investors exposure to the bond market. These ETFs track the performance of the JSE ALBI and CILI benchmarks |
10X Wealth GOVI Bond 10X Yield Selected Bond Satrix SA Bond Portfolio Satrix ILBI Portfolio FNB Government Inflation Linked Bond 1nvest SA Bond |
SA property |
Aggressive |
Investors seeking exposure to the overall SA property stock market |
1nvest SA Property Satrix Property Portfolio 10X South African Property Income |
Money Market/Income |
Conservative |
An index consisting of 3-month South African money market deposit rates. This product is suitable for investors seeking low-cost convenient alternatives to traditional non-listed products |
Satrix TRACI 3 Month
|
USDCash |
Conservative |
Investors seeking exposure to US Dollar denominated short term government bonds issued by the US Treasury. Since duration is relatively short, majority of the performance is driven by the USDZAR exchange rate. |
1nvest ICE US Treasury Short Bond Index |
Global Equity |
Aggressive |
These products provide broad based exposure to the overall US and global stock market, including Asia. |
1nvest MSCI World Satrix MSCI China Feeder Satrix MSCI Emerging Markets Satrix MSCI India Satrix Nasdaq 100 10X S&P 500 |
Global Equity Specialised/Sector |
Aggressive |
These products provide global exposure to factor based strategies, thematic themes and sector specific indexes |
Satrix Global Infrastructure Feeder Satrix MSCI Emerging Markets ESG Enhanced Satrix Healthcare Innovation Satrix Smart City Infrastructure 1nvest Global REIT Index |
Global Bonds |
Moderate |
These products provide global bond exposure by tracking the G7 bond index |
Satrix Global Aggregate Bond Feeder 1nvest Global Government Bond Index |
SA Government Bonds
Government bonds are effectively you (the investor) lending money to the government to support government fiscal spending. Government bonds then pay you periodic interest payments (usually semi-annually) which are called coupons, and your initial capital back at maturity date of the bond.
Let’s look at an example, if you have to buy a bond for R100 at a coupon rate of 10% for 10 years, you will receive coupons of R5 every 6 months for 10 years and at maturity of the bond you will receive the coupon plus your initial capital back.
Bonds are a cost-effective way of getting yield. Government bonds are generally considered less volatile compared to stocks but offer lower returns. The primary risk to a government bond is default risk, however SA government bonds have never defaulted in the past and are considered the highest rated type of bond according to rating agencies.
Below is a list of all SA Government bonds available:
Bond Type |
Maturity Date |
Yield to Maturity |
SAGB R186 |
21 December 2026 |
8.74% |
SAGB R2030 |
31 January 2030 |
9.85% |
SAGB R2035 |
28 February 2035 |
11.48% |
SAGB R2040 |
31 January 2040 |
12.27% |
SAGB R2048 |
28 February 2048 |
12.31% |
Bundles
If you are an investor that would rather opt for investment professionals to manage all the leg- work when deciding asset allocation, risk tolerance and diversification, then bundles are for you.
Bundles in a nutshell are actively managed investment vehicles that uses a combination of active asset allocation and passive investing to achieve a specified investment time horizon goal. Bundles typically come with higher fees compared to ETFs, however this is understandable because they offer professional management and diversification.
Below is a list of the Rise EasyRetire bundles that are available on EasyEquities:
Product |
Risk Tolerance |
Investment Approach |
RISE CPI +3 TFSA |
Conservative |
The bundle is a multi-asset, low-equity balanced solution that targets CPI +3% over a rolling 3-year period. |
RISE CPI +5 TFSA |
Moderate |
The bundle is a multi-asset, medium-equity balanced solution that targets CPI +5% over a rolling 5-year period. |
RISE CPI +7 TFSA |
Aggressive |
The bundle is a multi-asset, high-equity balanced solution that targets CPI +7% over a rolling 7-year period |
When exploring investment products for your TFSA, it's essential to consider your financial goals, risk tolerance, and time horizon. Diversification is key to building a resilient portfolio that can weather market fluctuations. Whether you choose ETFs, bundles or bonds, maximising the tax benefits of your TFSA can help accelerate your saving pot.
Remember, with EasyEquities no amount is too small to save in your TFSA, what is important is to remain consistent and disciplined with your investment objective and approach.
Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.
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