Which TFSA ETFs Could Have Built A Million-Rand Tax-Free Account?
Also read: A Short History Of South African TFSAs - how contribution limits have changed over time.
Many South Africans know that a Tax-Free Savings Account allows investment growth without paying tax on interest, dividends, or capital gains.
What few people realise is how much the returns can differ when investors contribute differently and choose different investments.
Some Tax Free Savings Accounts (TFSA) have been valued at over R1.5m.
So the question for this analysis is simple: If you maxed your TFSA contributions from inception, which ETF choices could have produced a TFSA worth more than R1 million today?
The Contribution Limits Used
This model uses the real South African TFSA contribution limits by tax year.
| Tax years | Annual limit |
|---|---|
| 2015/16 to 2016/17 | R30,000 |
| 2017/18 to 2019/20 | R33,000 |
| 2020/21 to 2025/26 | R36,000 |
| 2026/27 onward | R46,000 |
The lifetime contribution limit remains R500,000. These limits apply regardless of what you buy, which makes the TFSA a useful way to compare investment choices.
The Two ETF Experiments
Plan 1: Buy One ETF And Stick With It
In the first plan, every contribution buys the same ETF. Nothing is switched, sold, or rebalanced. This is the cleanest way to ask which single ETF did best for a disciplined TFSA investor.
Plan 2: Pick A Different ETF Each Year
In the second plan, each new investment year can buy a different ETF. Existing ETF holdings are left alone. Only new contributions can go into a new ETF.
This is a hindsight benchmark, not a realistic recommendation. It answers a different question: with perfect hindsight, which ETF would have been best for each year's new contribution?
How Contributions Were Invested
Each plan was tested with two contribution schedules.
| Schedule | Method |
|---|---|
| Annual upfront | The full annual allowance is invested on the first available trading day on or after 1 March. |
| Monthly drip | The annual allowance is split into 12 monthly purchases. |
Fractional ETF units are allowed so that every rand is fully invested.
Best Single-ETF Outcomes
The annual-upfront version invests the full TFSA allowance at the start of each investment year.
| ETF | First purchase | Contributed | Current value | Gain | Money-weighted return | R1m? |
|---|---|---|---|---|---|---|
| STXRES | 2015-03-02 | R421,000.00 | R1,424,504.99 | R1,003,504.99 | 19.69% | Yes |
| SYGUS | 2015-03-02 | R421,000.00 | R1,103,169.36 | R682,169.36 | 15.74% | Yes |
| SYGWD | 2015-03-02 | R421,000.00 | R987,320.80 | R566,320.80 | 14.00% | No |
| STXRAF | 2015-03-02 | R421,000.00 | R979,067.88 | R558,067.88 | 13.87% | No |
| STXSHA | 2015-03-02 | R421,000.00 | R975,831.53 | R554,831.53 | 13.82% | No |
| STX40 | 2015-03-02 | R421,000.00 | R939,866.60 | R518,866.60 | 13.23% | No |
| FNBT40 | 2015-03-02 | R421,000.00 | R938,173.54 | R517,173.54 | 13.20% | No |
| ETFT40 | 2015-03-02 | R421,000.00 | R924,599.27 | R503,599.27 | 12.97% | No |
| STXFIN | 2015-03-02 | R421,000.00 | R855,122.44 | R434,122.44 | 11.73% | No |
| SYGEU | 2015-03-02 | R421,000.00 | R832,539.32 | R411,539.32 | 11.31% | No |
With monthly contributions:
| ETF | First purchase | Contributed | Current value | Gain | Money-weighted return | R1m? |
|---|---|---|---|---|---|---|
| STXRES | 2015-03-02 | R401,833.33 | R1,346,780.10 | R944,946.77 | 20.33% | Yes |
| SYGUS | 2015-03-02 | R401,833.33 | R1,004,176.56 | R602,343.22 | 15.59% | Yes |
| STXRAF | 2015-03-02 | R401,833.33 | R939,391.66 | R537,558.32 | 14.50% | No |
| STXSHA | 2015-03-02 | R401,833.33 | R931,110.99 | R529,277.65 | 14.35% | No |
| SYGWD | 2015-03-02 | R401,833.33 | R904,921.54 | R503,088.21 | 13.89% | No |
| STX40 | 2015-03-02 | R401,833.33 | R891,201.56 | R489,368.22 | 13.64% | No |
| FNBT40 | 2015-03-02 | R401,833.33 | R887,834.26 | R486,000.93 | 13.57% | No |
| ETFT40 | 2015-03-02 | R401,833.33 | R877,097.28 | R475,263.95 | 13.37% | No |
| STXFIN | 2015-03-02 | R401,833.33 | R838,951.12 | R437,117.78 | 12.64% | No |
| SYGEU | 2015-03-02 | R401,833.33 | R774,950.81 | R373,117.48 | 11.33% | No |
Best Year-By-Year Hindsight Plan
The annual-upfront hindsight plan contributed
R421,000.00 and reached
R1,830,613.11 by 2026-09-19.
That is a gain of R1,409,613.11 and a 23.54% money-weighted return.
The table below shows the value of contribution for each year at 2026-09-19.
| Tax year | Contribution date | ETF bought | Amount | Purchase date | Value now |
|---|---|---|---|---|---|
| 2015/16 | 2015-03-01 | SYGUS | R30,000.00 | 2015-03-02 | R155,544.37 |
| 2016/17 | 2016-03-01 | STXRES | R30,000.00 | 2016-03-01 | R202,850.38 |
| 2017/18 | 2017-03-01 | STXRES | R33,000.00 | 2017-03-01 | R191,087.16 |
| 2018/19 | 2018-03-01 | ETF5IT | R33,000.00 | 2018-03-07 | R278,324.54 |
| 2019/20 | 2019-03-01 | ETF5IT | R33,000.00 | 2019-03-01 | R219,191.69 |
| 2020/21 | 2020-03-01 | ETF5IT | R36,000.00 | 2020-03-02 | R170,293.52 |
| 2021/22 | 2021-03-01 | ETF5IT | R36,000.00 | 2021-03-01 | R120,424.78 |
| 2022/23 | 2022-03-01 | ETF5IT | R36,000.00 | 2022-03-01 | R101,483.39 |
| 2023/24 | 2023-03-01 | ETF5IT | R36,000.00 | 2023-03-01 | R96,572.90 |
| 2024/25 | 2024-03-01 | STXRES | R36,000.00 | 2024-03-01 | R100,217.31 |
| 2025/26 | 2025-03-01 | STXRES | R36,000.00 | 2025-03-03 | R80,761.90 |
| 2026/27 | 2026-03-01 | 91DINC | R46,000.00 | 2026-03-02 | R113,861.16 |
The monthly-drip hindsight plan contributed
R401,833.33 and reached
R1,618,252.09 by 2026-09-19.
That is a gain of R1,216,418.76 and a 23.28% money-weighted return.
The important rule is that earlier holdings are never sold. The strategy is a collection of yearly ETF purchases, not a trading strategy.
The Opportunity Cost Versus A 7% Return
A useful comparison is the value of the same TFSA contributions if they had earned 7% per year, which is roughly the kind of return an investor might associate with a bond or savings-account benchmark. This is not a perfect risk-free proxy, but it gives the opportunity cost a plain-rand anchor.
| Contribution style | 7% benchmark value | Best single ETF value | Extra value versus 7% | Hindsight value | Extra hindsight value versus 7% |
|---|---|---|---|---|---|
| Annual upfront | R637,469.00 | R1,424,504.99 | R787,035.99 | R1,830,613.11 | R1,193,144.11 |
| Monthly drip | R599,107.67 | R1,346,780.10 | R747,672.44 | R1,618,252.09 | R1,019,144.43 |
Put differently, the best single-ETF outcomes did not just beat the amount contributed. In this historical run, they also created hundreds of thousands of rand more than a steady 7% benchmark.
What The Results Mean
A single-ETF approach could have produced a TFSA worth over R1 million. A portfolio value greater than R1.5 million is possible, but would require extremely good luck, market timing and ETF picking ability.
The point is not that investors should chase last year's winner - that is market timing, often a loser's game. The point is that TFSA outcomes are highly sensitive to long-term capital allocation. Staying the course with a single ETF can produce really good results, much higher than the risk-free rate, over the long term.
The single-ETF table is the cleaner investor comparison. The year-by-year table is the “what did history reward?” benchmark. It is useful, but it is also hindsight-biased.
Caveats
- These results are educational and historical. They are not a prediction of future returns.
- The model uses adjusted close as a total-return proxy. That depends on provider data quality and may not perfectly capture every dividend, fee, spread, platform cost, or real-world execution detail.
- Investors should also remember that concentration can be risky. The best historical ETF is not automatically the best future ETF.
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