How a Fund Manager Builds a TFSA in 2026

Your TFSA is one of the most powerful long-term investment tools available, but only if it’s positioned correctly. Vikash Shiba, Fund Manager at RISE EasyRetire, shares how he approaches TFSA portfolio construction for tax-free growth in 2026 and beyond.

Your TFSA is an Investment Tool – Not Just a Savings Account

A Tax-Free Savings Account (TFSA) is one of the most efficient long-term investment vehicles available to South African investors. From a portfolio-construction perspective, the benefit is clear: all interest, dividends, and capital gains earned within the structure are exempt from tax, allowing returns to compound without leakage.

Despite this structural advantage, many TFSAs remain conservatively positioned or under-optimised. In 2026, the discussion should move beyond whether to use a TFSA, and focus instead on how the underlying assets are allocated and whether they are aligned with long-term return objectives.

This article approaches the TFSA from an investment management lens, highlighting how investors can think about asset allocation, diversification, and risk management within the TFSA framework, while remaining cognisant of individual suitability and regulatory requirements.

A Quick TFSA Refresher (Still Relevant in 2026)

• Annual contribution limit: R36,000
• Lifetime contribution limit: R500,000

Once you exceed these limits, SARS applies penalties, and contribution room cannot be recovered. Because TFSA space is scarce and valuable, it is generally best used for assets with long-term growth potential rather than short-term parking instruments.


What Should Be Inside a TFSA in 2026? A Portfolio Construction View

There is no one-size-fits-all TFSA portfolio. The appropriate mix of investments depends on your investment horizon, risk tolerance, and personal circumstances. However, most well-constructed TFSAs include a combination of the following building blocks.

1. Growth at the Core: Equity ETFs

From an asset allocation perspective, equities remain the primary driver of long-term real returns. Holding equity investments inside a TFSA is particularly powerful because capital growth is never subject to capital gains tax.

US & Global Equity Exposure

Global equities continue to play a central role in TFSA portfolios, with US markets remaining a key growth engine. Investors often favour broad, low-cost ETFs that provide diversified exposure to global leaders across technology, healthcare, and consumer sectors.

Examples of global and US-focused ETFs available on EasyEquities include:

• 10X S&P 500 ETF – broad exposure to leading US companies

• Satrix Nasdaq 100 ETF – access to large global technology and innovation-driven firms

• 1nvest MSCI World ETF – diversified exposure across developed global markets

These ETFs may experience short-term volatility, particularly due to currency movements, but are generally suited to investors with longer investment horizons.

South African Equity Exposure

Local equities remain an important component of a diversified TFSA, offering exposure to domestic growth opportunities and attractive dividend yields.

Common South African equity ETFs include:

• Satrix SWIX Top 40 ETF – exposure to the largest companies listed on the JSE,, reduced offshore bias compared to traditional market-cap indices

Given the current global commodity cycle, some investors also allocate selectively to resource-focused exposure:

•  Satrix RESI ETF –exposure to South African mining and resource companies

Sector- or factor-based ETFs can enhance returns but tend to be more volatile and are typically used as satellite positions rather than core holdings.

Selective Exposure to China and Emerging Markets

While emerging markets can be volatile, selective exposure to China and broader emerging markets can provide diversification and long-term growth potential.

Examples include:

• Satrix MSCI China Feeder ETF

• Satrix MSCI Emerging Markets ETF

These allocations are generally more suitable for investors with higher risk tolerance and a long-term investment horizon.

2. Managing Risk: Bonds Inside a TFSA

Bonds play an important role in managing portfolio volatility and providing income stability.

In recent years, EasyEquities has expanded access to South African government bonds, allowing retail investors to invest directly in instruments previously less accessible.

Examples of SA government bonds available to retail investors include:

• SAGB R186

• SAGB R2030

• SAGB R2035 and longer-dated bonds

Government bonds provide predictable coupon payments and can help stabilise a TFSA portfolio, particularly for investors with lower risk tolerance or shorter time horizons. While government bonds are generally less volatile than equities, they are still subject to interest rate and credit risk.

Bond ETFs are another option for investors seeking diversified bond exposure without managing individual maturities. These include (not limited to) 10X Wealth GOVI Bond, Satrix SA Bond Portfolio and 1nvest SA Bond.

3. Cash and Income: Use with Purpose

Money market and income ETFs may be appropriate for short-term objectives or as temporary holdings. However, holding excessive cash inside a TFSA over long periods may reduce the long-term benefit of tax-free compounding.

These instruments are typically better suited to conservative investors, those approaching a specific financial goal, or just for pure diversification within their overall TFSA universe. These instruments include; 1nvest ICE US Treasury Short Bond Index and Satrix TRACI 3 Month.

4. A Simpler Approach: Professionally Managed Active ETF’s

For investors who prefer a hands-off approach, professionally managed Active ETFs provide diversified exposure across asset classes within a single investment.

EasyETF’s Balanced AMETF is designed around specific real-return objectives and are managed in line with a defined risk profile. While AMETF generally carry higher fees than passive ETFs, they offer professional oversight, diversification, and discipline.

My TFSA Watchlist: A Growth-Tilted Perspective

From a portfolio management perspective, I believe strongly in diversification as a means to smooth returns across market cycles. That said, my own TFSA positioning remains deliberately tilted toward growth assets, given the long-term nature of the structure.

In 2026, my watchlist remains focused primarily on US and South African equities, with selective emphasis on resource-linked counters that stand to benefit from a sustained global commodity cycle.

On the global side, US equity exposure continues to form a core allocation, particularly through broad-based indices and technology-tilted strategies that provide access to companies with durable earnings growth and strong balance sheets.

Locally, South African equities – and resource stocks in particular – remain compelling from a valuation and cash-flow perspective. Exposure to the resources sector provides leverage to global demand dynamics while offering diversification benefits relative to traditional growth sectors.

Alongside this equity bias, bonds are incorporated as a deliberate layer of diversification rather than a primary return driver. Government bonds, in particular, play a role in dampening portfolio volatility and providing balance during periods of equity market stress.

This approach reflects a balance between long-term growth objectives and prudent risk management, recognising that diversification is not about eliminating risk, but about managing it effectively over time.

From an investment management perspective, a TFSA should be treated as a long-term growth portfolio rather than a transactional savings vehicle. Asset selection, diversification, and risk budgeting matter just asmuch inside a TFSA as they do in institutional mandates.

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