Few months back the Canadian government introduced a brand new investment account to the already existing set of accounts such as RRSP, TFSA, RESP, and so on. The new investment account, titled First Home Savings Account or FHSA, is a very special type of investment/savings account for first-time home buyers in Canada. So, as a newcomer in Canada and planning to buy my first home here, this account was very appealing to me.

Why FHSA?

What’s so great about FHSA? I still have plenty of annual contribution room in my TFSA and RRSP. Why would I start to invest in another account? Here are the reasons;

1. FHSA is specially focused on first-time home buyers in Canada and the benefits of this account can only be reaped if you are buying your first home ever in Canada.
2. FHSA gives the best tax benefits–tax deductible on contributions (like the RRSP) and not subject to income taxes on a qualified withdrawal (like TFSA). In a way, FHSA contains the best of both RRSP and TFSA with regards to taxes.

If you want to learn more about the First Home Savings Account, read this article, where I explain the account features and benefits in detail.

In this article, I want to reveal my investments in my FHSA, my risk tolerance, investment goal, and returns on my investment so far.

Disclaimer: I hold my FHSA in my Wealthsimple account (affiliate link). And I let Wealthsimple manage my FHSA investment for me, while I control the TFSA and RRSP accounts, also on Wealthsimple. So, the assets I discuss below were chosen for me by Wealthsimple based on my investment goals and risk tolerance. The same investments might not suite your investment goals and risk appetite. So, always do your due diligence begore investing money.

My FHSA Characteristics

• Account type – Managed
• Goal – buy a home
• Theme – classic
• Risk level – 2 (conservative)
• Holdings weightage – 35% Equity and 65% fixed income

My First Home Saving Account Portfolio

Below are the current holdings and their weighted percentages in the account as of today.

Ticker	ETF Name	Focus	Holding %
GLOV	Goldman Sachs ActiveBeta(R) World Low Vol Plus Equity ETF	Global equities	10%
QUU	Mackenzie US Large Cap Equity Index ETF	U.S. equities	9%
EEMV	iShares MSCI Emerging Markets Min Vol Factor ETF	Emerging market equities	6.1%
ZEA	BMO MSCI EAFE Index ETF	International equities	5.8%
QCN	Mackenzie Canadian Equity Index ETF	Canadian equities	4.2%
ZAG	BMO Aggregate Bond Index ETF	Canadian aggregate bonds	37.4%
ZFL	BMO Long Federal Bond Index ETF	Government bonds	16.9%
ZCS	BMO Short Corporate Bond Index ETF	Canadian short-term bonds	8%
KILO	Purpose Gold Bullion Fund	Gold	2.5%
CAD	liquid cash	Cash	0.3%

As I mentioned above, these investment options have been selected for me by Wealthsimple based on my investment goal, timeline, and risk tolerance.

At a glance, we can see that there is a higher weightage on the bonds over equities. This is because my investment time frame is rather short-term. Hence, the portfolio’s equities would not have enough time to deliver in price appreciation within this time frame. Bonds give a fixed return and are assumed to be one of the safest forms of investments as they are issued by governments to fulfill their short term financing requirements. Also, the dividends from these fixed income ETFs will help me compound my investment faster.

Investment in the KILO (gold) fund acts as the anchor to my portfolio. It is supposed to carry the least risk as even US Dollars are backed against gold reserves. If all the companies in my FHSA portfolio fails, gold investments should still hold value (in theory).

The equity ETFs in the portfolio give me quite a wide range of diversification from the top companies in the world (less risky and low returns) to emerging markets (high risky and high returns).

My FHSA Returns so far

I have only begun investing in my FHSA account for a few months so far. Although this is not sufficient time frame to judge any investment portfolio performance, I want to keep track of it as much as possible. And keep you all informed in the process.

As of today, my overall portfolio performance rests at 0% – meaning nothing has improved nor lost me money so far. I did notice a couple of months with minimal negative performance due to market sentiments. However, the tiny monthly dividends I receive on this portfolio would be dollar-cost averaging into the same ETFs and bonds every month as well. This should help me keep adding more fractional shares every month and reduce my average cost.

I will continue to monitor the performance of this portfolio and keep a record of it here. If you are interested about this journey, keep this website bookmarked.

If you have any questions or feedback, do leave them in the comments section below.

Happy investing!