If you are an investor in Canada, you might have already heard of BlackRock iShares Canada.
It is a family of over 800 exchange-traded funds (ETFs) that comprise over USD $1.9 trillion in AUM. iShares is the largest provider of ETFs worldwide.
My iShares Canada ETF list overview will break down some of the most relevant iShares ETFs trading in Canada to help you make a more well-informed decision when seeking the best Canadian ETFs to add to your investment portfolio.
A global leader in ETFs, iShares offers over 800 different product offerings across a wide range of asset classes and investment strategies. iShares is a subsidiary of BlackRock, which is responsible for issuing and marketing iShares products.
iShares was founded in 2000. Initial iShares listings were established on major exchanges, such as the New York Stock Exchange (NYSE), European New Exchange Technology (Euronext), Chicago Board Options Exchange (Cboe), National Association of Securities Dealers Automated Quotations (NASDAQ), and NYSE Arca.
ETFs from iShares are a flexible method for investors to gain exposure to various market segments, including fixed income, emerging markets, and broad-based indexes. iShares combines low fees with tax-efficient structures to match an index, allowing ETFs to provide investors with more significant long-term savings than mutual fund products.
BlackRock Asset Management Canada Limited manages iShares ETFs. Its primary goal is to help more and more people experience financial wellbeing through long-term sustainability. iShares ETFs offer diversified and low-cost methods to tap into the markets’ potential, offering the most comprehensive ETF lineup in the country.
This section of my iShares Canada ETF list overview will break down some of the most prominent ETFs into four categories. I will briefly discuss each of them to help you understand which ETF product aligns with your investment goals.
Having a better understanding of each category and the ETFs iShares Canada offers for each will help you make a better decision about the products that can help you achieve your financial freedom while aligning with your risk tolerance.
iShares S&P/TSX 60 Index ETF is a Canadian ETF that seeks to provide investors with long-term capital growth by replicating the performance of the S&P/TSX 60 Index. iShares XIU is a medium-risk investment that allocates its entire funds to the top 60 Canadian companies based on their market capitalization.
It is the oldest ETF in existence in Canada, diversifying across several sectors of the Canadian economy. Despite its diversification, iShares XIU allocates almost the majority of its funds to the Royal Bank of Canada and Shopify Inc. due to the companies substantially larger market capitalizations than other underlying holdings’.
iShares XIU’s narrow focus on 60 companies makes it a relatively risky investment to consider. Declines in its top ten companies’ performance can significantly impact the ETF’s performance and returns. However, all its underlying holdings have wide economic moats that can ride out challenging market environments.
Check out my detailed iShares XIU review here.
iShares Core S&P/TSX Capped Composite Index ETF is another fund that seeks to provide investors with long-term capital growth by investing entirely in Canadian equity securities. iShares XIC allocates its funds to the Canadian stocks that constitute the S&P/TSX Capped Composite Index by replicating the underlying index’s performance, net of expenses.
iShares XIC is an all-equity ETF that is a medium-risk investment, diversifying its funds across several Canadian economic sectors. Unlike XIU ETF, iShares XIC has a more comprehensive approach towards investing in Canadian stocks. It allocates its funds to 219 Canadian equity securities, offering greater diversification than iShares XIU.
iShares XIC is an all-equity ETF with zero exposure to fixed-income securities. This can make returns and performance volatile in bearish stock market environments. However, its diversification across various sectors mitigates some of the volatility.
Check out my detailed iShares XIC review here.
iShares XSP is another all-equity ETF offered by iShares. It seeks to provide investors with long-term capital growth by replicating the performance of the S&P 500 Hedged to Canadian Dollars Index, net of expenses. The primary holding of iShares XSP is iShares IVV, another ETF offered by BlackRock Canada iShares.
iShares XSP invests in a broad basket of U.S.-based equity securities comprising 500 of the largest companies in the U.S. based on their market capitalizations. iShares XSP’s top five holdings consist of the largest IT companies in the U.S., with its allocation towards the IT sector accounting for more than 27% of its entire funds, as of January 2021.
iShares XSP’s broad diversification across different sectors of the U.S. economy means that the ETF reflects the performance of the U.S. stock market. Its tax-efficient structure makes it a significantly low-cost investment, and it eliminates currency exchange rate volatility by hedging its holdings against the Canadian dollar.
Check out my detailed iShares XSP review here.
iShares Core MSCI EAFE IMI Index ETF seeks to provide investors with long-term capital growth by replicating the MSCI EAFE Investable Market Index’s performance, net of expenses. It offers investors an internationally diversified portfolio. The ETF allocates its funds towards over 1,500 stocks diversified across Europe, Asia, and Australia, providing investors with exposure to a basket of equity securities outside of North America.
iShares XEF allocates a quarter of its funds to Japan-based equity securities and almost 15% of funds to U.K.-based equity securities. The rest of its funds are diversified across several other European and Asian markets.
iShares XEF is an all-equity ETF that does not provide investors with any exposure to fixed-income securities. Combined with its asset allocation favouring Japan-based and UK-based stocks more than other regions, any volatility in these regions’ stock markets could cause substantial volatility in investor returns.
iShares Core S&P U.S. Total Market Index ETF seeks to provide investors with long-term capital growth by replicating the performance of the S&P Total Market Index, net of expenses. iShares XUU is effectively a low-cost solution designed to be a long-term core holding for investor portfolios and offers exposure to the entire U.S. stock market.
iShares XUU invests primarily in four ETFs issued and managed by BlackRock Canada. All the underlying ETFs held by iShares XUU invest in a broad basket of stocks diversified across all sectors and market capitalizations in the U.S. economy.
iShares XUU has more significant exposure to the IT sector, allocating 22.68% of its funds to IT companies. The top three aggregate holdings for iShares XUU include Apple Inc. at 4.82%, Microsoft Corp. at 4.45%, and Amazon.com Inc. at 3.31%, as of April 15, 2021.
iShares Core MSCI All Country World ex Canada Index ETF is an all-equity ETF that seeks to provide its investors with long-term capital growth by investing in equity securities that constitute the MSCI ACWI ex Canada IMI Index, net of expenses. Its primary holdings include six iShares ETFs that invest in a globally diversified portfolio of stocks except for Canadian equity securities.
By investing in several ETFs that, in turn, invest in thousands of globally diversified individual stocks, iShares XAW offers investors a globally diversified exposure to equity securities.
Yet, despite its global diversification, iShares XAW invests over half of its funds to U.S.-based equity securities, approximately 7% towards Japan-based equity securities, and just over 5% of its funds to China-based equity securities.
iShares XAW’s performance can face substantial volatility in bearish conditions for the US stock market. It could be a viable asset for you to consider adding to your portfolio if you want to invest in stocks diversified worldwide without exposure to Canadian companies.
Check out my detailed iShares XAW review here.
iShares Canadian Select Dividend Index ETF is an all-equity ETF that seeks to provide its investors with long-term capital growth by replicating the performance of the Dow Jones Canada Select Dividend Index, net of expenses. iShares XDV could be an ideal investment for income-seeking investors who want exposure to a basket of diversified Canadian dividend-paying stocks without manually rebalancing such a portfolio.
iShares XDV focuses its entire fund allocation on the top 30 highest-yielding Canadian companies in the Dow Jones Canada Total Market Index. It means that investors can gain exposure to the most prominent dividend stocks trading on the TSX through dividends from the underlying stocks.
The fund’s narrow focus on 30 companies could lead to a volatile performance in terms of capital gains. However, its returns primarily rely on dividend income from underlying holdings, offering dividend-seeking Canadian investors a viable alternative to creating a manual portfolio.
Check out my detailed iShares XDV review here.
iShares NASDAQ 100 Index ETF (CAD-Hedged) is an ETF that seeks to provide investors with long-term capital growth by replicating the performance of the NASDAQ-100 Currency Hedged to Canadian Dollars Index, net of expenses. It offers investors exposure to 100 of the largest non-financial companies listed on the NASDAQ stock market based on their market capitalizations.
iShares XQQ can be an excellent asset to consider if you want to diversify into U.S. stocks with large market capitalizations while avoiding exposure to the financial sector. iShares XQQ allocates almost half of its funds to the IT sector, almost 20% to the communication sector, and almost 20% to the consumer discretionary sector.
iShares XQQ is a medium-risk investment that does not diversify regionally or across asset classes.
iShares Core Canadian Universe Bond Index ETF seeks to provide investors with income by replicating the performance of the FTSE Canada Universe Bond Index™, net of expenses. iShares XBB effectively offers investors exposure to a broad range of Canadian investment-grade bonds.
iShares XBB is designed to be a long-term core holding that pays out monthly cash distribution to investors. Hence, iShares XBB can be an excellent investment for income-seeking investors. With zero exposure to equity securities, iShares XBB makes for a very low-risk investment that you can consider adding to your portfolio.
The fund’s lack of exposure to equity securities means that your wealth growth with the ETF will rely solely on the fixed-income assets’ returns. Your capital invested in the ETF will not grow if there is a significant rally in equity markets worldwide.
iShares Core Canadian Short-Term Bond Index ETF seeks to provide investors with income by replicating the performance of the FTSE Canada Short-Term Overall Bond Index™. iShares XSB effectively offers exposure to a broad range of Canadian investment-grade bonds with relatively shorter-term maturities ranging from one to five years.
iShares XSB was designed to be a long-term core holding for investors, making it an excellent investment for income-seeking investors who have no interest in investing in equity securities. Its entire focus on fixed-income securities means that iShares XSB cannot provide investors with wealth growth through capital gains.
iShares XSB could be a viable investment for you to consider if you seek a low-risk investment that provides you with exposure to investment-grade bonds with shorter maturities.
iShares Canadian Corporate Bond Index ETF is an ETF that seeks to provide investors with income by replicating the performance of the FTSE Canada All Corporate Bond Index™, net of expenses. iShares XCB offers investors exposure to investment-grade Canadian bonds from the corporate sector, with maturities of at least one year.
iShares XCB seeks to provide investors with a consistent and stable passive income stream. It could be an excellent asset to consider if you want to customize your exposure to Canadian bonds by focusing only on investment-grade corporate bonds.
iShares XCB provides you with more significant exposure to bonds with maturities of three to five years and long-term maturities of more than 20 years. Its lack of exposure to equity securities makes it a very low-risk investment to consider for income-seeking investors.
iShares Core Canadian Short-Term Corporate Bond Index ETF is a fund that seeks to provide income by replicating the performance of the FTSE Canada Universe and Maple Short Term Corporate Bond Index, net of expenses. It is a low-cost portfolio that consists of short-term and investment-grade Canadian bonds that typically offer higher interest than government bonds.
iShares XSH pays investors monthly cash distributions with low-interest rate risk and is designed to be a long-term core holding. Therefore, iShares XSH could be an excellent investment for income-seeking investors with a low-risk tolerance.
iShares XSH invests in corporate bonds with a wide range of maturities, but it focuses half of its funds towards bonds with three-year to five-year maturities and two-year to three-year maturities.
iShares S&P/TSX Global Gold Index ETF is a fund that seeks to provide its investors with long-term capital growth by replicating the performance of the S&P/TSX Global Gold Index, net of expenses. iShares XGD offers investors targeted exposure to a basket of global securities of gold and gold-related producers.
Its primary focus on gold-related securities means that iShares XGD could be used to express a global sector view for gold-related companies. Its top ten holdings consist of gold-mining and gold-producing companies, with almost negligible exposure to other metals. iShares XGD offers some global diversification by allocating funds to gold-related securities from Canada, the U.S., and South Africa.
iShares XGD is also an all-equity ETF because it does not allocate any funds to fixed-income assets. Hence, its lack of diversification across different sectors means that its performance relies heavily on underlying commodity prices. Significant declines in gold prices may affect the returns for its underlying holdings, causing substantial volatility to investor returns.
However, the fund does not invest directly in physical gold bullion, providing investors with some protection against commodity price fluctuations.
iShares Gold Bullion ETF seeks to replicate the price of gold bullion, minus fees and expenses. The ETF is a pure-play for investors seeking exposure to the price of gold hedged to the Canadian dollar, thereby mitigating volatility caused by volatile currency exchange rates.
iShares CGL offers convenient and cost-effective exposure to physical gold bullion. It could be an excellent way to gain low-cost exposure to gold without the upfront cost of buying the rare yellow metal itself if you want to protect your capital from the effects of inflation.
Gold prices almost always go up when the overall economy declines, making iShares CGL an excellent choice for investors seeking exposure to the safe-haven asset during bear markets. Its direct exposure to physical gold bullion also means that its returns decline significantly when gold prices go down.
iShares Core Equity ETF Portfolio is an all-in-one ETF portfolio that offers investors a portfolio of ETFs with regionally diversified equity securities in one convenient package at a low-cost fee structure. The ETF invests in four different ETFs offered by BlackRock Canada that invest in a total of over 9,000 individual stocks trading on exchanges worldwide.
The ETF allocates almost half of its funds to U.S.-based equity securities, just over 20% exposure to Canadian stocks, with the rest being diversified across emerging markets and the Pacific. Its top holdings consist of Apple Inc., Microsoft Corp., and Amazon.com Inc.
Five of its top ten holdings are from the IT sector. So, it’s no surprise that iShares XEQT’s most significant asset allocation is towards the global IT sector, accounting for 18.06% of its entire fund. iShares XEQT is one of the least risky investments you can consider due to its substantial diversification across different regions and sectors.
Check out my detailed iShares XEQT review here.
iShares Core Growth ETF Portfolio is another all-in-one ETF portfolio that provides investors with exposure to a broad basket of U.S.-based and Canada-based equity securities and fixed-income assets.
iShares XGRO seeks to provide investors with long-term capital growth by offering them exposure to a basket of stocks broadly diversified by asset class and across regions in one package.
The low-cost fee structure allows its investors to keep more of what they earn. The fund invests primarily in BlackRock Canada’s ETFs, offering an almost 80/20 split between equity securities and fixed-income assets like bonds and GICs.
The top stocks in its aggregate underlying holdings include Apple Inc. at a 1.74% asset allocation, Microsoft Corp. at 1.61%, and the Royal Bank of Canada at 1.24%.
iShares XGRO has a low to medium risk. Its exposure to fixed-income securities can also mitigate its losses in case global equity markets face bearish conditions.
Check out my detailed iShares XGRO review here.
iShares Core Balanced ETF Portfolio is another all-in-one ETF portfolio that offers investors exposure to a basket of securities diversified across asset classes and regions.
iShares XBAL traditionally offers investors a 60/40 split between equity securities and fixed-income assets. As of April 14, 2021, it has 63.65% in equity and 36.18% in fixed-income securities.
It is possible that the fund’s managers took it upon themselves to provide investors with a boost to investment returns by capitalizing on recovering global equity markets. Its most significant asset allocation is towards the tech sector that has been the primary growth driver for stock markets in the U.S. and Canada for several months.
iShares XBAL ETF’s safe approach to allocating its funds makes it a low to medium-risk investment that you can consider adding to your portfolio.
Check out my detailed iShares XBAL review here.
iShares Core Income Balanced ETF Portfolio is an all-in-one ETF portfolio that is broadly diversified by asset class and across regions in one convenient package. The fund seeks to provide investors with long-term capital growth and income by investing primarily in one or more ETFs managed by BlackRock Canada.
iShares XINC provides investors with an asset allocation split of almost 80/20 between fixed-income assets and equity securities. Its greater exposure to fixed-income assets means that the ETF portfolio is an excellent investment for income-seeking investors who have a low-risk tolerance and seek wealth growth through capital gains.
iShares XINC has a low-cost fee structure that allows investors to keep more of what they earn, and its Management Fee of 0.18% includes all underlying ETF management fees.
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ETFs are becoming an increasingly popular choice for investors. Many investors prefer ETFs over mutual fund products with similar benefits and features due to the ETFs’ lower costs .
iShares is the largest ETF provider worldwide. I hope my iShares Canada ETF list overview gives you the insight you need to make better investment decisions regarding Canadian ETFs.