The Tax-Free Financial savings Account (TFSA) contribution restrict for 2026 is $7,000, remaining unchanged for the third consecutive yr. Whereas some buyers rush to make use of their new room on January 1st, others choose to evaluate the funding panorama first.
A lot of the warning at the beginning of this yr stems from rising geopolitical tensions and persevering with commerce uncertainties. Given these circumstances, the place must you make investments your TFSA contribution to higher navigate potential volatility?
A balanced technique of income-generating dividend payers and growth-oriented property might help cushion market swings and seize long-term capital appreciation. Extra importantly, you successfully hedge in opposition to market headwinds. Three particular choices on the TSX finest match the income-plus-growth method.
Earnings
Canadian Utilities (TSX:CU) is a logical selection for TFSA buyers in search of defensive stability. This $12.5 billion diversified international vitality infrastructure firm is the TSX’s first dividend king. On January 13, 2026, this top-tier utility inventory introduced a 1% dividend hike, extending its dividend progress streak to 54 years.
Administration mentioned the extremely contracted and controlled earnings base is the muse for continued dividend progress. The payouts develop in keeping with sustainable earnings progress, which is pushed by CU’s regulated and long-term contracted investments.
If you happen to make investments at this time, the share worth is $45.91, whereas the dividend yield is 4%. Dividend longevity and sustainability are hallmarks of a reliable passive earnings supplier. CU is a resilient anchor in your TFSA.
Development
Most of the 30 high Canadian shares final yr (the “TSX30 winners”) have misplaced steam in 2026 as uncertainties take their toll. Nonetheless, seventh-ranked 5N Plus (TSX: VNP) stands out, outperforming all of the high-ranking shares above it with a year-to-date achieve of practically 56.4% by mid-February.
At $27.72 per share, the three-year return is plus-872.6%. Had you invested $6,500 (TFSA restrict in 2023) in VNP three years in the past, your funding can be value $63,221.05 at this time. The $2.5 billion firm serves shoppers in numerous vital sectors, offering specialty semiconductors and efficiency supplies. These merchandise are important for the renewable vitality, house, and pharmaceutical industries.
On January 30, 2026, 5N Plus introduced that it had been awarded a US$18.1 million grant by the U.S. Authorities to increase capabilities and improve capability for recycling and refining germanium at its facility in St. George, Utah.
Its President and CEO, Gervais Jacques, mentioned the award will place 5N Plus to satisfy the quickly rising demand for germanium-based technological purposes in the USA.
Broad-based month-to-month earnings
Including the Vanguard FTSE Canadian Excessive Dividend Yield Index ETF (TSX: VDY) into the combo is a brilliant transfer. This exchange-traded fund tracks the efficiency of the Canadian fairness index. For the reason that 56 inventory holdings include dividend payers in practically all main sectors, besides actual property, VDY delivers a broad-based month-to-month earnings.
At $65.76 per share, VDY gives a 3.2% distribution yield and a month-to-month payout frequency. Along with immediate diversification and publicity to blue-chip shares, you’ll be able to benefit from the ability of month-to-month compounding to speed up TFSA progress.
Factors to think about
A TFSA portfolio in 2026 have to be constructed for resilience, earnings, and important long-term capital appreciation. The trio of CU, VNP, and VDY can endure present uncertainties and future market headwinds.