How do I benchmark a TFSA account?

LaraC

LaraC

Honorary Master
Joined
Mar 11, 2014
Messages
42,673
Reaction score
1,847
With the introduction of TFSA's four years ago I’ve contributed R 126 000,00 which have grown to R 153 989,76.

I’d like to know is if there is a benchmark against which I can measure its performance.

Any advice is welcome. :)
 
What fund type(s) were you invested in? If I eyeball your numbers it looks in the region of 5% growth per annum? Equities in general havent performed that great over the last few years; and funds within a TFSA is generally the same as those in other funds (such as Unit Trusts), just with different tax treatment
 
RandomGeek said:
What fund type(s) were you invested in? If I eyeball your numbers it looks in the region of 5% growth per annum? Equities in general havent performed that great over the last few years; and funds within a TFSA is generally the same as those in other funds (such as Unit Trusts), just with different tax treatment
Click to expand...
It is currently invested in a money market fund.

The growth is a bit higher than that if you keep in mind that you could invest a maximum of R 30 000,00 for the first two years and R 33 000,00 for the following two.
 
Your simple growth was 22,2% for the period of +- 4 years (not annualised).
I think collective investments in multi-asset, High Equity category is an appropriate benchmark as that is basically the type of fund you will invest your pension in for the long term.
Over the past 5 years (unfortunately, 4 years not available) the simple growth for the average fund in that category was 27,6%. Over 3 years, the average return was 11,8%. (Source: ProfileData).
You did worse than the best-performing fund in that category, the Long Beach Capital Flexible Fund (51% simple return over 5 years), but better than the worst performers.
Performance would be in line with what local equities returned, but considerably worse than foreign equities in rands. The cumulative (simple) return of the Satrix MSCI World Index unit trust over five years was 74.4%.
Just curious as to why you invest in cash/money market for a TFSA? If you haven't used your annual tax exemption of R23 800, you get zero tax benefits from holding cash in a TFSA.
The asset classes with the most tax benefits in a TFSA:
1. Listed property (high yields, especially at the current low prices, which is usually taxed at your marginal rates)
2. Shares declaring dividends (especially preference shares and high yielding shares, usually taxed at 20%)
3. Money market/cash/bonds, but ONLY if you've already used your interest exemption.
Of course, your TFSA investments form part of your overall portfolia that should be diversified.
I hold ONLY listed property in my TFSA, but that is the only listed property I have and it is not more than 10% of my total investments.
 
LaraC said:
It is currently invested in a money market fund.

The growth is a bit higher than that if you keep in mind that you could invest a maximum of R 30 000,00 for the first two years and R 33 000,00 for the following two.
Click to expand...
WTF have you been ?
 
Inflation. You can't actually just do a side by side comparison as a normal investment account attracts dividend withholding tax, tax and fees on trades and capital gains tax where a tfsa/tfta doesn't so by the time you cash out it's a clean sum.
 
I track the performance of my discretionary investments where I am making regular contributions and occasional withdrawals by "unitising" the portfolio. Here is a good video on how to do it:

https://justonelap.com/tracking-performance-unitise-your-portfolio/

You can then compare the performance of the unit price vs an appropriate benchmark, be it Top40/Fixed deposit/S&P500 etc. depending on what your investment goal is.
 
Sputnik100 said:
Your simple growth was 22,2% for the period of +- 4 years (not annualised).
I think collective investments in multi-asset, High Equity category is an appropriate benchmark as that is basically the type of fund you will invest your pension in for the long term.
Over the past 5 years (unfortunately, 4 years not available) the simple growth for the average fund in that category was 27,6%. Over 3 years, the average return was 11,8%. (Source: ProfileData).
You did worse than the best-performing fund in that category, the Long Beach Capital Flexible Fund (51% simple return over 5 years), but better than the worst performers.
Performance would be in line with what local equities returned, but considerably worse than foreign equities in rands. The cumulative (simple) return of the Satrix MSCI World Index unit trust over five years was 74.4%.
Just curious as to why you invest in cash/money market for a TFSA? If you haven't used your annual tax exemption of R23 800, you get zero tax benefits from holding cash in a TFSA.
The asset classes with the most tax benefits in a TFSA:
1. Listed property (high yields, especially at the current low prices, which is usually taxed at your marginal rates)
2. Shares declaring dividends (especially preference shares and high yielding shares, usually taxed at 20%)
3. Money market/cash/bonds, but ONLY if you've already used your interest exemption.
Of course, your TFSA investments form part of your overall portfolia that should be diversified.
I hold ONLY listed property in my TFSA, but that is the only listed property I have and it is not more than 10% of my total investments.
Click to expand...
Wow! Some of those figures look amazing. I’ll have to reconsider my options. Thank you. :)
 
Swa said:
Inflation. You can't actually just do a side by side comparison as a normal investment account attracts dividend withholding tax, tax and fees on trades and capital gains tax where a tfsa/tfta doesn't so by the time you cash out it's a clean sum.
Click to expand...
Thank you. :)
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X