TFSA Outcomes: 100% US vs. 100% CAD (2009–26) 🇨🇦🇺🇸
— TSX vs S&P 500: The $227K TFSA Gap If you maxed out your TFSA every single year since it launched in 2009, your cumulative contributions equal $109,000 CAD today. But depending on how you allocated between Canadian 🇨🇦 and US 🇺🇸 equities, your balance today ranges from $271,500 to $499,300! Market Outlook 💰 * The Tech Expansion Gap: Canada’s market ($XIC) gave solid dividend income through banks and energy, but missed out on the massive US mega-cap tech expansion that drove global equity growth over the last decade. * Unhedged Currency Engine: Holding unhedged US equities ($VFV) handed Canadian investors a strong double compounding effect as the US Dollar strengthened against the Loonie over this 18-year timeline. * The Hybrid Sweet Spot: While 100% S&P 500 delivered maximum growth, a 60/40 US/Canada allocation ($VGRO) still reached ~$392,000, capturing substantial upside while keeping local dividend cash flow and tax efficiency intact. Quick Allocation Summary (2009–2026): * 100% US 🇺🇸 Equity: $499,315 (+358% total return) * 70% US / 30% Canada: $416,631 (+282% total return) * 60% US / 40% Canada: $392,017 (+260% total return) * 50% US / 50% Canada: $368,788 (+238% total return) * 30% US / 70% Canada: $326,272 (+199% total return) * 100% Canada 🇨🇦 Equity: $271,545 (+149% total return) Tickers to Watch 👀 CAD Investors: 🇨🇦 * $VFV – Vanguard S&P 500 Index ETF * $XIC – iShares Core S&P/TSX ETF * $XEQT – iShares Core Equity ETF * $VGRO – Vanguard Growth ETF USD Investors: 🇺🇸 * $SPLG – SPDR Portfolio S&P 500 ETF * $VOO - Vanguard S&P 500 * $ITOT – iShares Core S&P Total U.S. Investors Takeaway 💰 1. The Sector Composition Gap: Explains why TSX (heavy in banks, pipelines, energy) could not keep pace with the S&P 500's high-margin tech expansion. 2. Unhedged Currency Engine: Highlights how holding US equities provided Canadian investors with a double compounding effect due to USD strength vs. CAD over the 18-year timeline. 3. Quantifying Home Bias Cost: Breaks down the exact $227,770 growth gap caused by over-concentrating in Canadian domestic assets. 4. Foreign Withholding Tax Reality Check: Clarifies why the 15% US withholding tax in a TFSA is only a minor ~0.20% annual drag that should never deter investors from holding US growth assets. 5. Total Compounding vs. Cash Flow: Discusses why accumulating max capital in a TFSA first yields a much larger bucket to draw passive income from later. 6. The Hybrid Sweet Spot: Demonstrates why a 60/40 or 70/30 US/Canada split achieves the ideal balance between global growth and local cash-flow stability. Question: How are you splitting your TFSA right now, are you leaning heavy into US tech growth, sticking with Canadian 🇨🇦 dividend cash flow, or running a balanced mix? — This is for educational and discussion purposes only and does not constitute financial advice. Original content and photo researched by me; AI was used only to polish the post.
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11 Comments
AMDY
@penjen · 15d
Your range is pretty spot on. I had mostly US stocks and some Canadian stocks in my TFSA 35k grew to 225k. Can ETF give that kind of return? Didn't invest from 2016-2024. I finally maxed out my TFSA last year with stock (GOOG and TSM) transfer from non-reg.
Catherine
@ffcatherine · 15dEdited
I’m 78% USA & 9% Cdn aprox plus some international & yes I didn’t chose based on avoiding withholding taxes rather I chose based on what I believe in & my TFSA is almost all USA tech for the long run
Nicole
@investinginsweatpants · 15d
What if you’re range is not near there 😭
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