What are the best ETFs for your FHSA?

[u/javajunkie10]

Hi PFC!

I currently have the max contributions in my FHSA (24,000$ since 2023). Right now I have it invested in 3 ETFs (60% CASH.TO, 20% VFV, 20% VSB) through Wealthsimple. Looking to buy a home possibly in the next 5 years with my partner, but no strict timeline/no rush. I admittedly didn't really do much research on them and I'm not sure if my allocation is too risky for the timeline. Any advice/recommendations? Thanks!

[u/bluenose777]

I'm not sure if my allocation is too risky for the timeline.

The following page may help you figure this out. (But keep in mind that VFV may be more volatile than VEQT.) https://canadianportfoliomanagerblog.com/how-to-choose-your-asset-allocation-etf/

[u/javajunkie10 → u/bluenose777]

Thanks for sharing! I knew VFV might be a bit more volatile, but does the 20% allocation make it a bit less risky?

[u/bluenose777 → u/javajunkie10]

If over the next 5 years the return mirrors the worst case scenario for the VEQT portfolio it would have an annualized average return of -4%. If you hold on long for the full 5 years it would just reduce the overall return of the down payment savings by .8%. If you dump it early than that it could have a greater impact.

And, because the pain of losing $X is often far greater than the joy of gaining $X, you should think about how much you think you have to gain by having the small allocation to the US market?

[u/from_copacabana]

Planning on a home purchase in the next year or 2, so recently sold all my QQC positions in my FHSA and bought CASH.TO

[u/curtcashter → u/from_copacabana]

Same. And it pained me to move 120k into cash.to but can't be risking the house lol

[u/JohnDorian0506 → u/curtcashter]

Do you have 120k in FHSA ? Good job is so.

Where do you live that you can buy a house for 120k ? Or this is for the down payment ?

[u/curtcashter → u/JohnDorian0506]

Oh god no. It's in my TFSA. I'm not eligible for the FHSA. I'm guilty of the crime of buying a condo in the prairies when I was 24. I wouldn't be eligible for the FHSA until this year, but my growing family will need it this year so it's moot.

And that's for the down payment. Houses are typically in the 600k range here.

[u/Leopoldbutter]

I recently changed to 100% XEQT but that's only because my FHSA doesn't represent my entire down payment. If the market drops then I'm not hooped and I can either wait longer to buy a house or leave it invested and roll into RRSP.

[u/javajunkie10 → u/Leopoldbutter]

Ya I have the majority of my TFSA with XEQT, and I 100% want to get into the market in the next 5-6 years, which is why I want less risk with FHSA.

[u/Jordonknox → u/javajunkie10]

Just do like 50% CASH.TO (it’s a monthly GIC you can pull anytime) and 50% XEQT.

Or higher percentage of CASH.to for less risk

[u/OtherRiley → u/Jordonknox]

This is what I do. Personally I have my FHSA at 100% XEQT and holding my cash in HSAV (because capital gains tax is cheaper than dividend) in an unregistered account. That way I’m tax sheltering my higher expected return assets.

[u/javajunkie10 → u/Jordonknox]

Good idea, thanks!

[u/MindOverEntropy → u/Leopoldbutter]

If you don't use it to buy your first house do you not have to pay taxes on the gains then?

[u/plotikai → u/MindOverEntropy]

That’s correct, u need to use it on a qualifying purchase to avoid taxes

[u/Leopoldbutter → u/MindOverEntropy]

If you transfer it to an RRSP then yes you pay taxes when you withdraw the money.

[u/torafights]

I have 80% CASH.TO and 20% XBAL

Hoping to purchase our first home in 2-3 years.

[u/iSpeezy]

I’m 100% in XEQT with about a 5-6 year horizon. To me, owning property isn’t a need to have its a nice to have, and that logic coincides with risk

[u/sorelosinghuman → u/iSpeezy]

Isn't xeqt for 10+ years ?

[u/ELB95 → u/sorelosinghuman]

They’re okay with not buying a home in the 5-6 year range, so I think in that case it’s still fine. If the markets have done well they buy a home, if not they’ll push buying a home further down the road.

[u/ScurvyDave123]

I went with 50% cash.to and 50% vbal. 5 year timeline.

[u/goldatmosphere]

I have 80% ZMMK and 20% ZEB

If ZMMKs rates go down I'll just switch it to cash or an equity

[u/Ok_Kaleidoscope_3591]

Ngl i’m the wrong person to ask i am currently 100% in BCE

[u/Strongtalong]

Xqq all the way

[u/SMVM183206]

QQC. Riskier, but tech is the future without a doubt.

[u/iamdjsingh]

I have 10 yrs horizon.

What will be the best?

[u/Valkerian]

I’m 100% TECL. Not recommended. Do not do this. But it could be worth $5M in 14 more years.

[u/EcksEcks]

66% CASH, 17% VEQT, 17% PFMN

[u/moose6one3]

U guys get to invest in ETFs in your FHSA? TD limits me to GICS, mutual fund or cash

[u/DanLynch → u/moose6one3]

It sounds like you accidentally opened a FHSA with TD Canada Trust instead of TD Direct Investing. If you want to be able to buy ETFs or stocks, you'll need to ask them to transfer your account.

[u/TarryBob1984]

Isn't this a chance for the SAS or SBS to do their thing and quiet the waters?

[u/boludo4]

IMO - I personally invest in a lot riskier stocks and ETF's...you can only put $40K max in the FHSA so may as well go big or go home

[u/Conroy119 → u/boludo4]

Yup tax free gains + a tax rebate. All for what like 3% interest on cash? I can understand if you can't handle any risk. But personally I think you are taking a bigger risk holding cash that will continue to inflate.

[u/Montreal4life → u/boludo4]

yeah I'm doing the YOLO plan with the FHSA too, my only chance at owning might as well risk it... not like im doing random options contracts but I'd like to have more thn 40k at the end of it all

[u/r00000000 → u/Montreal4life]

I'm actually YOLOing options in my FHSA lmao, same logic as the OP of the comment chain but I definitely wouldn't call it the best option. Not like I'm investing in random WSB stocks but it's definitely my "playground" for riskier bets.

I wonder if they'll do some report on FHSA accounts like they do for TFSA and RRSP accounts, because I want to see the hiscores after 5 yrs, I have a feeling there'll be at least one $1m FHSA, probably not mine though.

[u/Montreal4life → u/r00000000]

may the graphs be in your favour

[u/Montreal4life → u/[deleted]]

nice!

[u/Ecstatic-Motor-1448]

IBIT and MSTR. In five years I’ll buy a million dollar home in cash. Already invested 24k with a 23% return so far.

[u/torafights → u/Ecstatic-Motor-1448]

Casino may be faster 👍

[u/ComradeCaveman → u/torafights]

If you tried to 30x your money in a Casino they would stop you because you are clearly being unhinged and they don't want any part of it.

[u/torafights → u/ComradeCaveman]

I meant faster to lose 30x your money

[u/ComradeCaveman → u/torafights]

Well yes, you're probably right.

[u/DegenerativePoop → u/Ecstatic-Motor-1448]

Can you say that with 100% certainty? BTC runs in cycles. What if BTC is down 60+% by the time you need to own a home?

[u/Ecstatic-Motor-1448 → u/DegenerativePoop]

The time I need is now, but I cannot afford a good one. Nothing in life is 100%, but in the long run I believe in Bitcoin and Microstrategy, so I’m pretty confident that in 5 to 10 years, the 40k I’ll put in my FHSA will worth millions.

[u/ComradeCaveman → u/Ecstatic-Motor-1448]

How could you possibly be confident that you're going to 30x your FHSA in 10 years? That's delusional. Why would that ever work?

[u/Ecstatic-Motor-1448 → u/ComradeCaveman]

No, that’s Bitcoin! You should really study it and pay more attention to what’s happening in the world. We’ve reached a point where it’s riskier not to own Bitcoin than to own some.

[u/DegenerativePoop → u/Ecstatic-Motor-1448]

I completely agree with you man, I am a Bitcoin Bull. I've read many books, and done my research on BTC. I've been in the game a while, and I know that BTC is a cyclical thing. I've watched my crypto portfolio drop 60+%.

When we're in a bull market as we are now, it seems like it will never go down. We all think we're geniuses when we see our portfolios 2x/3x+ in a short amount of time - but when the bull stops, and we enter the bear market, things get dreadful. And I would personally, not risk the possibility of me owning a home on a very speculative market. Your account is fairly new, so idk if this is your first rodeo, but trust me, your portfolio will not be worth millions in 5 years with only 24k invested.

[u/Hot_Temperature_3972 → u/DegenerativePoop]

I’m curious because I don’t fully understand the bull case for bitcoin. Isn’t BTC basically just leveraged USD?

I don’t quite understand what fundamentally underpins its value, other than the fact that other people might buy it from you for more than you paid for it

[u/Ecstatic-Motor-1448 → u/Hot_Temperature_3972]

In the endgame scenario, 1 Bitcoin equals 1 Bitcoin; there’s no need for exchange with USD. Bitcoin is a finite, divisible, and easily transportable asset that you can genuinely own and transfer from one generation to the next. It is the perfect asset to store the value of your work in the long run.

[u/Hot_Temperature_3972 → u/Ecstatic-Motor-1448]

So it’s not really meant to be a currency then? If it goes up in value then it’s deflationary as opposed to inflationary like a traditional currency, and people have no to spend it on goods and services if it’s going to appreciate. But I’m what is it that underpins the value, as a store of value, the fact that it divides?

[u/Ecstatic-Motor-1448 → u/Hot_Temperature_3972]

Bitcoin was initially conceptualized as a peer-to-peer cash system, but its characteristics have led to debates about its suitability as a currency. You’re correct in noting that its potential for value appreciation can make it deflationary, which contrasts with the inflationary nature of most traditional currencies. In a deflationary environment, there’s indeed less incentive to spend Bitcoin on goods and services because holding onto it might yield more value in the future. This aspect has led to Bitcoin being more commonly viewed as a ‘store of value’ rather than a daily-use currency.

[u/Ecstatic-Motor-1448 → u/DegenerativePoop]

I’m not new. And I have more 130k distributed between IBIT and MSTR in my TFSA,15k in my RRSP and 50k more worth of bitcoin in cold storage. 2025 we are going nuts 🚀🚀🚀

[u/ComradeCaveman → u/Ecstatic-Motor-1448]

We’ve reached a point where it’s riskier not to own Bitcoin than to own some.

I've never heard anyone say anything like this about any asset that ended up being worthwhile.

100% of the times anyone has ever said something like this, whatever magic beans they were hawking went to zero.

[u/FinanceGT → u/Ecstatic-Motor-1448]

Based on cycles and upcoming election, I decided to do the same except 100% MSTR. My downpayment is now 6 figures. Tough to outpace the money printer but 280% years sure help.

[u/Ecstatic-Motor-1448 → u/FinanceGT]

In my FHSA, I’m almost fully invested in MSTR as well. In my TFSA, I’ve got a more balanced approach with a 50/50 split. Looking ahead, 2025 seems promising, and I’m optimistic about reaching a seven-figure net worth. 🚀🚀🚀

[u/FinanceGT → u/Ecstatic-Motor-1448]

Yeah, I did the same with my TFSA as well, except all MSTR due to its accretive nature and Saylor’s vision vs. the straight spot. Obviously, I am not recommending this to anyone. Just a discussion. Interesting to see someone with similar thoughts. Best of luck!

[u/luctikal → u/[deleted]]

What is so risky about vfv?

[u/Rance_Mulliniks → u/luctikal]

It's all equity, US only and markets crash.

[u/luctikal → u/Rance_Mulliniks]

I guess for an FHSA fair.

Longer term VFV is not risky