I really love some of the ideas readers of this blog send through from time to time. A cool one that came through recently was a suggestion to try find out what some of the top personal finance and investment experts, thought leaders and media peeps are holding in their tax-free savings accounts (TFSAs).
So I did just that – and in the true spirit of the South African personal finance community, most were more than happy to help out.
I found some of the responses really interesting, though they all provide some food for thought. I must stress however that none of the below should be regarded as investment or financial advice. Remember that a TFSA is usually only a small part of a bigger overall investment portfolio, and everyone has their own goals, timelines and risk appetite.
Plus, as etfSA director and co-owner Nerina Visser put it, “As a woman, I always reserve the right to change my mind, as time goes on, and new information comes to light :)”.
In other words, please don’t read too much into this; always invest according to your own goals, risk appetite and time frame.
Okay, with the formalities out of the way, here we go …
In alphabetical order, this is what some of the more well-known financial peeps are holding inside their TFSAs:
Simon Brown, founder of Just One Lap: I hold Satrix Property ETF (31.8%), Ashburton Global 1200 ETF (36.6%) and Sygnia Itrix MSCI World ETF (29.5%).
Maya Fisher-French, founder of Maya On Money: All my TFSAs, kid included, are with Satrix. I hold the Divi Plus as I’m a firm believer in dividend investing. Right now it has a yield of 4.5% – if you consider that matches a drawdown rate, it’s a powerful retirement tool. I don’t hold offshore as my non-TFSA money is all invested directly offshore. That forms a significant part of my retirement plan along with my local RA [retirement annuity]. My TFSA is a tiny portion of my investment base at this stage, considering it was only introduced a few years ago.
Warren Ingram, executive director of Galileo Capital: I have been buying the Nedgroup Property Fund in my TFSA since TFSAs were launched. To date, it has been a bad decision if one reviews performance, but I like the high levels of income generated by the fund and hope that the performance will recover. Over the long term, I would view the income generated from this TFSA as a way to pay for our medical aid costs (if those are still around).
Bright Khumalo, portfolio manager at Vestact: I’m a balls-to-the-wall kind of guy and right now I think SA is extremely cheap as you’ll see by my split. As a super young man with some healthy appetite for risk I have a 50/50 split of the Sygnia Swix Index and the Sygnia Skeleton 70.
Charles Savage, CEO of Easy Equities and Purple Group: I hold the Emperor Core Flexible Equity (Everest) Bundle. It consists of:
- Satrix Divi ETF (22.18%)
- Satrix 40 ETF (18.67%)
- Satrix S&P 500 ETF (13.11%)
- Stanlib S&P 500 Information technology ETF (12.07%)
- Satrix RESI ETF (8.75%)
- Satrix MSCI World ETF (8.23%)
- Satrix Fini ETF (5.77%)
- Ashburton MidCap ETF (4.36%)
- Satrix Nasdaq 100 Feeder Portfolio (3.14%)
- Cash (2.44%)
Dr Adrian Saville, founder and chief executive of Cannon Asset Managers: My go-to option is the Cannon Global Growth portfolio because it has the highest compounding potential, underpinned by hard currency with greatest optionality. If I lived on Mars and could allocate capital anywhere in the world, inside of a TFSA, this is the place to invest – it is where our children’s TFSAs are invested.
Michael Treherne, portfolio manager at Vestact: In my account I have the Ashburton Top 100 through FNB. At the time I signed up it was the cheapest around, and I get great eBucks. My wife is in the CoreShares S&P 500. Both are funded through a monthly debit order, to give me dollar-cost averaging.
Kristia van Heerden, CEO of Just One Lap: Since our ‘Single ETF strategy’ Fat Wallet episode [Just One Lap’s weekly podcast dealing with questions about money], I’ve been stocking up on ASHEQ. I like that ETF for its wide diversification and emerging market exposure. I also enjoy getting dividends to reinvest – my opportunities to play around in my investment account are limited to reinvesting my dividends. I like the simplicity of a single ETF strategy. It helps me be less reactive when things go wrong in the world. I only have to keep track of one choice.
Local Equity (25.1%): CTOP50, 11.4% (broad-based domestic equity market, core holding); ASHMID, 3.7% (‘SA Inc’ shares, relative value after long period of underperformance); STXDIV, 6.3% (high dividends); and DIVTRX, 3.6% (consistent dividends).
Local ‘bonds’ (9.8%): PREFTX, 9.8% (preference shares, highest yield).
Local property (12.6%): PTXTEN, 12.6% (high yield, asset class diversification).
Global equity (40%): STXWDM, 21.5% (broad-based global equity market, core holding); GLODIV, 9.1% (higher yield, investment style diversification); and STXEMG, 9.4% (broad-based emerging market exposure, longer-term high growth).
Global property (12.5%): GLPROP, 12.5% (asset class diversification, higher yield).
Well that was interesting. And wow, what a diverse range of choices – from a single holding to ten different holdings, from passive to active, and simple to complex.
Which does make me wonder, this article may well have left you a little perplexed as to how best to approach your own TFSA investment. If this is the case, I want to leave you with something Van Heerden said when submitting her contribution:
“In these tax-free accounts, hitting your allocation every year is way more important than what you choose. Because there’s no tax liability, these accounts offer a wonderful platform to figure out your own investment style. If you choose the wrong ETF, you can rectify it later by contributing to one that’s better suited to you. Like most people, I took a while to hit my stride. That I chose differently at the beginning didn’t hurt me in the least. Don’t let the choice of ETF keep you from starting. You got this!”
That is pretty solid advice. Remember, your choice of investment has significantly less impact than not investing at all.
This article was originally published on the Stealthy Wealth blog here.
The views and opinions shared in this article belong to their author, cannot be construed as financial advice, and do not necessarily mirror the views and opinions of Moneyweb.