Horizons HGRO Review (Feb 2023): 100% Equity All-In-One Portfolio

Over 90% of the fluctuations in your portfolio’s return variations generally comes from asset allocation.

One-ticket solutions are a great way to approach investing early on because they take care of several problems that can arise if you hold just a few stocks or a specific sector or country ETF.

These problems include being too concentrated in a particular sector or investing solely in one geographical region.

HGRO is an all-equity asset allocation ETF from Horizons. We’ll provide a Horizons HGRO review below, and if it’s a good choice as an all-equity one-ticket fund to consider for your personal accounts.

Our Verdict
HGRO Review
8/10Our Score

Horizons HGRO

One-ticket all-equity portfolio ETF 

A well-diversified equity ETF that holds approximately six underlying equity ETFs.

Pros
  • Diversified Equity Exposure
  • Liquid Solution
  • Large Size
  • Tax-Efficiency in Non-Registered Accounts
Cons
  • Short Performance Track Record
  • No Dividend Yield

What is Horizons’ HGRO ETF?

HGRO is an all-equity asset allocation ETF offered by Horizons in Canada. It is a fund of funds, meaning that it invests in several underlying ETFs.

HGRO.TO is currently trading at close to $13.19.

HGRO Key Facts

As of Dec 31, 2021:

  • Ticker Symbol: HGRO.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $170.14 Million (As of Aug 17, 2022)
  • MER: 0.16%
  • 12-Month Trailing Yield: 0.02%
  • Currency Traded: CAD
  • Registered Accounts Availability: Yes

What is an Asset Allocation Fund?

Asset allocation generally refers to the percentage that is allocated to either fixed income or equities.

These asset allocation funds typically vary from very conservative (100% fixed income) to maximum growth (100% equities). HGRO falls in the second category as it aims to have at least a 99% allocation to equities at all times.

A key benefit of asset allocation funds is that they rebalance over time to their specific targeted allocation. This means that if market conditions cause the percent allocations to change, the portfolio manager will adjust them back in line with the targeted percentages.

Essentially, asset allocation funds are meant to be purchased and held over the long term with minimal oversight from you as the investor.

HGRO MER

HGRO’s MER is 0.16%, which is very low when compared to other all-equity asset allocation strategies. When compared to most equity ETFs and mutual funds, HGRO’s MER is again significantly lower.

HGRO Dividend Yield

The underlying ETFs held by HGRO are mostly Horizons’ Total Return Index ETFs. These ETFs are structured in such a way that they pay a minimal or zero income each year.

As a result, HGRO’s yield is close to zero.

From a tax-efficiency perspective, this is great because dividends are taxed less favourably than capital gains.

Horizons HGRO’s dividend yield as of December 31, 2021:

  • 12-month trailing yield: 0.02%
  • Distribution yield: 0.02%
  • Dividend schedule: Annual

HGRO Performance

Here is the recent performance of HGRO:

52-Week Low: $11.14
52-Week High:  $14.65
YTD Return: 6.98%
3-Month Returns: 9.06%

Growth of a hypothetical $10,000 since the inception of Horizons HGRO:

As of July 31, 2022:

1mo3mo6moYTD1 yrSIR**
Horizons Growth TRI ETF Portfolio7.54-1.29-9.79-13.90-8.4910.06
Source: HorizonsETFs.com

Go to the Horizons website for real-time performance numbers of HGRO.

What does HGRO Invest In?

HGRO invests at least 99% of its assets in global stock ETFs. These ETFs themselves entirely hold equities based on their specific geographic mandates.

HGRO looks to offer investors geographically diversified exposure to stocks around the world.

HGRO Asset Allocation

Asset ClassNetShortLongCat.Index
Canadian Equity17.540.0017.546.253.17
U.S. Equity51.210.0051.2154.6359.28
International Equity0.630.000.6333.6537.50
Fixed Income0.000.000.000.230.00
Other12.821.1713.991.410.05
Cash17.8179.0296.834.910.00
Source: Morningstar.com

HGRO Top Holdings

Here are the top holdings of HGRO as of Aug 17, 2022, as you can see it is a fund of funds and consists of many other ETFs:

Security NameWeight
Horizons US Large Cap Index ETF (HULC)33.19%
Horizons NASDAQ-100 Index ETF (HXQ)20.69%
Horizons S&P/TSX 60 Index ETF (HXT)18.11%
Horizons Intl Developed Mkts Eq Ix ETF (HXDM)13.96%
Horizons Europe 50 Index ETF (HXX)7.05%
Horizons Emerging Markets Equity IdxETF C$ (HXEM)6.96%
CASH0.05%
Source: HorizonsETFs.com

HGRO Sector Weighting

SectorsInvestment %Cat %
 Basic Materials3.213.88
 Consumer Cyclical10.7910.94
 Financial Services15.2215.14
 Real Estate1.511.80
 Communication Services10.267.21
 Energy6.584.91
 Industrials7.9212.37
 Technology26.8516.03
 Consumer Defensive6.2410.23
 Healthcare8.6914.61
 Utilities2.742.88
Source: Morningstar.com

Horizons HGRO Risk Indicator

HGRO is a low-to-medium risk ETF:

Source: HorizonsETFs.com

HGRO vs Other Funds

Several other all-equity asset allocation ETFs exist in Canada as competitors to HGRO.

HGRO vs XEQT

iShares’ XEQT ETF is a similar option to consider, being a 100% equity asset-allocation portfolio in Canada.

XEQT is much larger than HGRO in terms of size, with $1.1 billion in assets under management. XEQT comes with a higher MER of 0.20% compared to HGRO’s 0.16%.

XEQT only holds four underlying ETFs, making it more fund-concentrated than HGRO. XEQT also pays a decent yield with quarterly distributions. This makes it less tax-efficient than HGRO but more appropriate for investors that are looking for income.

XEQT has a performance track record that is very similar to HGRO’s. The ETF has an inception date of August 7, 2019.

Since HGRO is offered at a lower MER, is more tax-efficient in non-registered accounts, and holds more ETF positions, we recommend it over XEQT.

HGRO vs VEQT

Vanguard’s VEQT is another all-equity asset-allocation portfolio available in Canada.

VEQT is much larger than HGRO in terms of size, with $2.0 billion in assets under management. VEQT comes with a higher MER of 0.24% compared to HGRO’s 0.16%.

VEQT, like XEQT, only holds four underlying ETFs, making both more fund-concentrated than HGRO. VEQT also pays a decent yield with annual distributions. This also makes VEQT less tax-efficient than HGRO but more appropriate for investors that are looking for income.

XEQT has a performance track record that is slightly longer than HGRO’s. The ETF has an inception date of January 29, 2019, so it still has a short performance track record.

Since HGRO is offered at a lower MER, is more tax-efficient in non-registered accounts, and holds more ETF positions, we also recommend it over VEQT.

Is HGRO, VEQT, Or XEQT Better?

As a second option to consider behind HGRO, XEQT is likely marginally better than VEQT.

Both XEQT and VEQT are massive funds, with VEQT having almost twice as many assets under management. At these large asset levels, the specific amount of AUM is not as important when comparing funds.

XEQT comes at a marginally lower MER than VEQT, which is always helpful to the end investor. This is the main factor leading to XEQT being a little bit better compared to VEQT.

Is HGRO a Good Investment?

Given our above analysis, HGRO is a great investment vehicle for accessing an all-equity one-ticket portfolio. A common way to invest in HGRO is to combine it with a fixed-income ETF, in order to properly match your risk tolerance.

HGRO is one of the cheapest options among its competitors in Canada, meaning that you are paying the least.

The ETF is the most tax-efficient among VEQT and XEQT because it pays a yield that is close to zero. This is extremely advantageous in non-registered accounts.

HGRO also invests in a larger number of ETFs than both VEQT and XEQT, offering greater diversification across funds. This does not necessarily mean that it is better diversified across underlying stocks, which depends on the number of holdings in each underlying ETF.

HGRO is relatively smaller than both iShares’ and Vanguard’s ETFs, but it is not small enough to put it at risk of closing down early.

Given all of these features, HGRO is a great investment to consider for the right investor.

How to Buy Horizons HGRO ETF in Canada

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Our Final Verdict

HGRO is a great ETF to consider if you are an investor with a medium or high-risk tolerance.

If you are looking for simplicity in a one-ticket solution, HGRO does a superior job than both XEQT and VEQT.

Check out this list of all of Horizons All-In-One ETFs.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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