July 17, 2023

Diversify, then Concentrate


Number of ETFs: 5

Local: 2

Foreign: 3

Total Expense Ratio: 0.25% to 0.62%

Dividends: 5.49% to 7.76%



I keep my ETF strategy very simple in my TFSA. ETFs are by nature lower risk than individual stocks and already diversified. I then intentionally attempt to concentrate my ETFs in the markets I believe will do best, like technology and mining.


  1. Decide on the number of ETFs you want.
  2. Decide on the mix between local and foreign exposure.
  3. Decide on the mix you want between equities, cash and property.
  4. Find the lowest cost provider for each of the ETFs. Sometimes identical ETFs are provided by different providers.
  5. Dividends play an important role in a TFSA, as dividends do not form part of your R36,000 limit. They can fast-track your growth.
  6. I always check the Compound Annual Growth Rate (CAGR) of an ETF. Investing in non-performers is a no-go.
  7. Pay special attention to the top ten holdings in each ETF that you own. Owning the identical stocks in your individual stock portfolio is asking for trouble. Owning one or two is okay, but copying what the ETF does exposes you to more risk than is needed.


The tax season is coming to an end 28 February 2023. If you can, invest in your TFSA before then.

 Use this link to compare ETFs



Disclaimer: Nothing in this article should be seen as financial advice. Everything stated is for educational purposes only. Always do your own due diligence. 


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