Which 10X fund is best for your tax-free savings account? A guide based on your age, risk profile and ambitions

An introduction to investments in South Africa [video] - Rands and Sense by 10X

Want to know about offshore investing, property as an asset class, tax-free savings accounts and everything in between? Rands and Sense by 10X is here to help you understand investment fundamentals. Read more

Investors often make use of a tax-free savings account (TFSA) to accumulate savings. A tax-free savings account should ideally be used as a long-term investment vehicle, where it is able to potentially grow and compound returns made over the long term.

10X offers a wide range of low-cost funds that are well-diversified across the asset classes. This makes them a great option for investing within the TFSA wrapper. In this article, we will look at the 10X funds on offer and investigate the appropriate fund choice to align with your investor profile and long-term financial goals.

What is a tax-free savings account?

A tax-free savings account is not a savings account in the traditional sense; it is actually an investment account with greater potential for strong capital growth over the long term. This investment vehicle was introduced by the National Treasury in 2015 as a way to incentivise South Africans to save, due to the tax savings on offer. There are limits in place when it comes to the contributions allowed; the maximum annual contribution amount is R36 000, and the maximum lifetime allowance is R500 000.

Not adhering to these limits may lead to a 40% tax imposed on the excess contribution amount. Growth within the tax-free savings account is tax-free, meaning there is no capital gains tax, interest or dividends tax. This will then mean that there are potentially more available returns to grow and compound over time.

Retirement Annuity vs Tax-free Savings Account vs Bond: Where Should Your Extra Money Go?

Got extra money to invest? Compare three powerful options: Retirement Annuity, Tax-Free Savings Account (TFSA), or paying off your bond faster. Learn the pros and cons of each to make an informed choice for your financial future. Read more

Why your choice of tax-free savings fund matters so much

A TFSA is a long-term wealth-building vehicle, not a savings account. A TFSA is designed to potentially produce strong returns when compounded over time. For this reason, many investors choose to include equities in their underlying portfolio selection as a means of driving long-term growth. Despite being more volatile in the short-term, equities have historically delivered higher long-term returns than bonds or cash.

Being too conservative with your TFSA fund selection may jeopardise the potential growth of your TFSA over time. Keeping your TFSA mostly in cash or low-risk assets may feel safer, but it limits the advantage of tax-free compounding, one of the TFSA's greatest benefits. Remember, you should think of a tax-free savings account as an investment vehicle, rather than a regular savings account.

10X offers a TFSA calculator, a free online tool that allows you to forecast the potential growth of your TFSA over time.

The tax-free savings account advantage: The bigger the growth, the bigger the tax-free benefit

The growth within the TFSA is tax-free, meaning that there are more returns available to potentially grow and compound over time. Higher potential returns from investing in equities mean even more available returns to compound and grow your TFSA over the long term. The more taxes you avoid, the more capital remains invested to compound further.

Why fees matter even more in a tax-free savings account

Compounding can either work for you or against you. High fees can impact the growth potential of your TFSA over time by reducing the base on which your future returns can potentially compound.

You would therefore ideally look to minimise fees in order to allow for more potential growth of your returns over time. A difference of ‘only’ 1% in fees can still severely impact the growth of your TFSA; more of your returns will be paid towards fees, meaning there are fewer returns available to be reinvested and allowed to grow.

Understanding 10X’s investment philosophy

Index tracking over active management

At 10X, we make use of an index tracking investment strategy alongside a more active approach to asset allocation, allowing us to be more cost-effective. This kind of strategy focuses on consistent returns for the investor over the long term. An index-tracking investment strategy is when the makeup of a benchmark index, such as the S&P 500, is mimicked in order to try and get the same returns. It involves fewer activities such as research, analysis and trading, meaning there are fewer costs, which may ultimately mean lower fees for the investor.

Active management involves a fund manager aiming to get the best returns, which may involve picking the winning stocks and timing the market. There are more activities associated with this kind of strategy, such as research, trading and buying and selling, which may result in higher fees being passed onto the investor.

Data from the SPIVA Scorecards suggests that index tracking may outperform active management most of the time. According to the latest SPIVA South Africa Scorecard (as of 31 December 2024), 60.84% of South African actively managed equity funds underperformed the S&P South Africa DSW Capped Index over the ten years ending 31 December 2024.

At 10x, we take a more active approach to asset allocation. Asset allocation refers to the mix of different asset classes that your TFSA capital is invested in within the TFSA wrapper. These are usually equities, real estate, bonds and cash. Equities are likely to generate the best returns in the long term, but they are also the most likely to be the most volatile of the asset classes. As data suggests, equities have historically produced returns above inflation by around 7% annually - over the long term (based on JSE All Share Index performance versus CPI from 1960-2020), but past performance does not guarantee future results.

Real estate may also generate some good returns, as well as provide a hedge against inflation. Bonds are more stable, but they may generate lower returns in the long term. This is not to say that bonds will never outperform, just that it is generally seen as the more conservative option. Cash is the most stable of the asset classes, but is likely to generate the lowest returns of all the asset classes.

You may also like to diversify your TFSA offshore in order to hedge against any local market instability and depreciation of the Rand. Asset allocation can play a major role in the performance of your TFSA, especially over the long term. Therefore, you would aim to be very strategic, ensuring that you align this with your investor profile and long-term financial objectives.

Low fees = More money working for you

10X understands the importance of minimising fees, and therefore, allowing more of your returns to be reinvested where they can potentially grow and compound over time. Fees charged by 10X are generally less than 1%, depending on the product that you select and the amount invested.

This is highly competitive when the industry standard for fees is sitting at around 1.5% to 3%. Please explore our product page for the most up-to-date fee information.

The different 10X fund options for tax-free savings accounts

At 10X, we offer a range of different funds that you can invest in within the tax-free savings account wrapper. Let’s have a look at some of these funds:

This is the first 10X flagship fund. It provides investors with a mix of both local and international assets. It includes a higher percentage of growth assets, but it is still not a 100% equity fund. This fund is well-suited to an investor who is looking to both invest and grow their funds over the long term. You would look to invest for 5 years or more.

Fund exposure is 64% local and 36% offshore. Since its inception, the 10X Your Future Fund has delivered an annualised return of around 11.2%. In shorter periods, the fund returned approximately 13.9% over the past year, 16.1% p.a. over three years, and 13.8% p.a. over five years. Information is correct as of September 2025.

This is the second of 10X’s flagship funds. This cost-effective fund provides the investor with exposure to a variety of both local and international interest-bearing assets, aiming to balance both capital stability and a high level of income. Ideal time horizons for this fund would be 3 years or more.

Fund exposure is 84.4% local and 15.6% offshore. Since its inception, the 10X Income Fund has delivered returns of around 10%. Over the past year, the fund returned around 8.9%. Fund information is correct as of September 2025.

This fund offers investors 100% offshore exposure. It is a cost-effective, passively managed fund that tracks the MSCI World Index Fund. It looks to maximise long-term growth for investors by making use of a globally diversified equity portfolio.

Since its inception, the MSCI World Index Feeder Fund has delivered annualised returns of approximately 13.7%. In shorter periods, the fund returned around 16.3% p.a. over the past year and 20.8% p.a. over the past three years.

This fund is best-suited to an investment period of at least 3 years. It offers investors exposure to both local and offshore assets, with a higher percentage of growth assets compared to bonds and cash.

Fund exposure is 66.1% local and 33.9% offshore. The 10X Moderate Fund has delivered an annualised return of approximately 9.9% since inception. Over shorter periods, the fund returned around 12.6% over the past year, 14.9% p.a. over three years, and 12.7% p.a. over five years. Information is correct as of September 2025.

This fund seeks capital growth with low volatility. It includes a higher percentage of bonds and cash versus the percentage of growth assets. The fund mostly includes local assets, while still including some international exposure. It would be suited to an investment period of at least 1 to 3 years or even longer.

Fund exposure is 72% local and 28% offshore. The 10X Defensive Fund has delivered an annualised return of approximately 8.7% since inception. Over shorter periods, the fund returned around 10.3% over the past year, 12.6% p.a. over three years, and 10.5% p.a. over five years. Information is correct as of September 2025.

The Money Market Fund is a conservative fund that is a good holding fund for investors who are looking to preserve capital as well as income. This low-risk fund is well-suited to investors who are looking for liquidity. The primary aim of this fund is to generate interest income, preserve capital and provide liquidity.

Fund exposure is 100% local. The 10X Money Market Fund has delivered an annualised return of approximately 7.1% since inception. Over shorter periods, the fund returned around 7.8% over the past year and 8.1% p.a. over three years. Information is correct as of September 2025.

Which 10X fund should you choose? (Age, goals and risk profile)

Your risk tolerance levels may change as you move through the various life stages. As a young investor in your 20s or 30s, you may be more risk-tolerant, and in response, you may look to invest in a higher equity fund. Your timelines are potentially longer, meaning that you have more time to ride out any short-term market volatility that may occur.

A middle-aged investor in their late 40s or early 50s may be less risk-tolerant and may lean towards a slightly more balanced portfolio, while still including a healthy percentage of equities. You may wish to balance both capital preservation and growth at this life stage.

An older investor who is looking at shorter timelines may be more risk-averse and therefore feel more comfortable with a lower equity fund. The fund that you invest in should always be in alignment with your investor profile.

The role of fees when choosing a tax-free savings account fund

Fees can play a major role in the potential growth of your tax-free savings account. Some fees you may see deducted include:

Advisor fees: If you are making use of an advisor, they may charge you both initial and ongoing fees for their advice and services.

Administration fees: There are generally fees deducted for administration-related tasks. These would be for tasks such as compliance and tax.

Management fees: These are the fees charged for the management of the fund.

Fee comparison example

Let’s look at an example of 1% in fees vs 3% in fees, and assume the following:

Monthly contribution: R3,000

TFSA lifetime cap: R500,000 (reached in 13 years and 11 months)

Investment term: 30 years

Annual return: 12%

Annual inflation: 6%

Scenario 1 (1% in fees): After 30 years, the final investment value is approximately R1,438,627

Scenario 2 (3% in fees): After 30 years, the final investment value is approximately R901,248

We can see how a small difference in fees can make a major difference in retirement outcomes. This example is for illustrative purposes only, and real results may vary. You can learn more about fees here.

At 10X, our fees are transparent, simple, and cost-effective, ensuring they are easily understood by all investors. You can expect no hidden fees or surprises, as we believe in making investing as straightforward as possible for you. With our low fees, more of your money works for you.

Putting it all together: A simple framework for choosing the right 10X TFSA fund

Here is a useful, practical framework that can help you ascertain if a 10X fund to be used for your TFSA aligns well with you:

• Assess your risk tolerance levels: Consider how comfortable you are with market volatility. Higher-equity funds offer stronger long-term potential but can be more volatile in the short term. Your ability to stay invested during a volatile market is a major factor in your potential success.
• Decide on your time lines: How long do you envisage keeping your funds invested for? The longer that you plan to keep your TFSA invested, the more you may benefit from growth-focused funds. Shorter timelines, on the other hand, may call for a more balanced or defensive approach.
• TFSA goals: What are your plans for your TFSA? Will it be for retirement purposes, education or another purpose altogether? Think about the purpose of the account. Your goals help determine how much growth you need and how much volatility you can accept.
• Consider fees: Ensure you are aware of the fees you are paying and compare and evaluate these fees. Fees play a major role in long-term investment outcomes, especially in a tax-free savings account where growth compounds tax-free.
• Fund selection: Once you understand your risk level, time horizon and goals, choose a 10X fund that mirrors these factors.
• Review: As your life changes, your investment strategy may need to as well. Revisit your fund choice each year to make sure it still aligns with your goals and personal circumstances. Only make adjustments if your circumstances have materially changed.

Final Thoughts: Your TFSA’s success depends on the fund you choose

A TFSA is a powerful investment vehicle which, if used correctly, may generate some excellent growth over the long term. Ensuring the fees that you are paying are on the lower end of the spectrum, coupled with an appropriate asset allocation, can help you leverage the potential compounding growth benefits of the TFSA. Our impressive range of well-diversified funds on offer for investors means there is a fund available to suit your investor profile and financial goals. Our skilled and experienced 10X investment consultants are just a phone call away if you have any questions regarding starting your TFSA and the 10X fund options available. Get in touch and secure your future today.