Looking to invest globally outside of Canada?
One of the easiest ways to do so is by using an international equity ETF.
In this iShares XAW ETF review, let’s go over if this global equity investment vehicle is right for you.
All-Equity Exchange-Traded Fund
BlackRock iShares XAW is a 100% equity all-in-one ETF portfolio.
- Is easy to use and purchase
- Easy global diversification
- Is highly liquid
- You may have to hold your entire holding if your risk tolerance changes.
iShares XAW ETF aims to have 100% exposure to equity securities by replicating the MSCI ACWI ex Canada IMI Index’s performance.
XAW invests in almost every other developed market other than Canada.
XAW.TO is currently trading at close to $37.48.
XAW Key Facts
As of October 06, 2023:
- Ticker Symbol: XAW.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $1.9 Billion
- MER: 0.22%
- 12-Month Trailing Yield: 1.69%
- Currency Traded: CAD
- Number of Underlying Holdings: 9001
- Registered Accounts Availability: Yes
Who Should Invest in XAW?
Determining whether iShares XAW ETF is a suitable investment for you depends on your investor profile. Here are some factors to consider:
- Investment Goals: Consider your investment objectives. Are you looking for long-term capital appreciation, income generation, or a combination of both? iShares XAW is primarily geared towards equity growth.
- Risk Tolerance: Evaluate your risk tolerance carefully. This ETF is exposed to equity markets, which can be volatile. Ensure that your risk tolerance aligns with the potential fluctuations in the value of your investment.
- Diversification: Assess your existing portfolio. If you already have significant exposure to international markets, adding iShares XAW ETF might over-concentrate your portfolio in global equities. Diversification should be a key consideration.
- Time Horizon: Your investment horizon matters. iShares XAW ETF is well-suited for long-term investors who can ride out market fluctuations over time.
- Tax Situation: Consider your tax situation and whether the tax implications of holding international assets align with your financial goals.
Its total assets under management stand at $1.6 billion as of June 30, 2022.
iShares XAW ETF boasts a Management Expense Ratio (MER) of 0.22%. Global equity ETFs generally have higher MERs. XAW MER is in line with other comparable investments.
iShares XAW’s dividend yield as of October 5, 2023:
- 12-month trailing yield: 1.69%
- Distribution yield: 1.73%
- Dividend schedule: Semi-annual
iShares XAW ETF was launched on February 10, 2015. Here are the hypothetical returns of $10,000 invested since inception:
As of September 30, 2023:
| 1y | 3y | 5y | 10y | Incept. | |
|---|---|---|---|---|---|
| Average Annual Return (%) | 18.71 | 7.68 | 7.04 | – | 8.15 |
| Benchmark (%) | 18.51 | 7.24 | 7.07 | – | 8.17 |
Go to the Blackrock website for real-time performance numbers of XAW.
iShares XAW is a medium-risk ETF that you can consider adding to your investment portfolio.
It invests in a basket of ETFs managed by BlackRock Canada that, in turn, invests entirely in equity securities diversified worldwide.
By investing primarily in six ETFs, iShares XAW ETF provides investors with low-cost exposure to thousands of individual international stocks.
XAW does not include any Canadian stocks.
It has $1.60 billion in total assets under management as of October 06, 2023, and here is the ETFs it is invested in:
| Ticker | Name | Sector | Weight (%) |
|---|---|---|---|
| IVV | ISHARES CORE S&P 500 ETF | Financials | 53.49 |
| XEF | ISHARES MSCI EAFE IMI INDEX | Other | 25.77 |
| XEC | ISHARES MSCI EMERGING MARKET | Financials | 11.07 |
| ITOT | ISHARES CORE S&P TOTAL U.S. STOCK | Financials | 3.86 |
| IJH | ISHARES CORE S&P MID-CAP ETF | Financials | 3.61 |
| IJR | ISHARES CORE S&P SMALL-CAP ETF | Health Care | 2.10 |
This section of my reviews typically discusses the asset allocation split between fixed-income and equity securities for the ETF.
iShares XAW is an all-equity ETF. This means it does not allocate funds to bonds or fixed-income securities.
As of October 5, 2023, iShares XAW ETF has allocated 99.39% of its funds to equity securities. It holds the remaining assets in cash.
| Asset Class | Net (%) |
|---|---|
| Canadian Equity | 0.00 |
| U.S. Equity | 61.41 |
| International Equity | 37.98 |
| Fixed Income | 0.00 |
| Other | 0.04 |
| Cash | 0.57 |
I will show you its exposure breakdowns to equity securities based on geography as of October 5, 2023.
iShares XAW ETF is diversified across several countries besides Canada. Although it primarily focuses on the U.S. equity security market, the remaining exposure is divided among Japan, China, the U.K., China, France, Switzerland, Australia, Germany, Taiwan, India and South Korea.
| Type | Fund (%) |
|---|---|
| United States | 62.81 |
| Japan | 6.27 |
| United Kingdom | 3.91 |
| China | 2.93 |
| France | 2.80 |
| Switzerland | 2.38 |
| Germany | 2.00 |
| Australia | 1.96 |
| India | 1.94 |
| Taiwan | 1.79 |
| Korea (South) | 1.37 |
| Cash and/or Derivatives | 0.49 |
| Other | 9.37 |
Shown below is a breakdown of its underlying holdings for the top ten securities as of July 14, 2022:
| Ticker | Name | Weight (%) |
|---|---|---|
| AAPL | APPLE INC | 4.09 |
| MSFT | MICROSOFT CORP | 3.81 |
| AMZN | AMAZON COM INC | 1.82 |
| NVDA | NVIDIA CORP | 1.77 |
| GOOGL | ALPHABET INC CLASS A | 1.28 |
| TSLA | TESLA INC | 1.13 |
| META | META PLATFORMS INC CLASS A | 1.10 |
| GOOG | ALPHABET INC CLASS C | 1.10 |
| BRKB | BERKSHIRE HATHAWAY INC CLASS B | 0.99 |
| UNH | UNITEDHEALTH GROUP INC | 0.76 |
Here is a breakdown of iShares XAW ETF sector weightings as of October 5, 2023:
| Type | Fund (%) |
|---|---|
| Information Technology | 20.87 |
| Financials | 15.15 |
| Health Care | 11.86 |
| Consumer Discretionary | 11.48 |
| Industrials | 11.12 |
| Communication | 7.29 |
| Consumer Staples | 7.04 |
| Materials | 4.67 |
| Energy | 4.52 |
| Real Estate | 2.91 |
| Utilities | 2.59 |
| Cash and/or Derivatives | 0.49 |
| Other | 0.01 |
XAW is a low-to-medium risk:
iShares XEQT is an all-in-one ETF portfolio offered by BlackRock iShares. It consists of several BlackRock ETFs that focus on equities. The main difference is that iShares XEQT also invests in Canadian stocks, and reblances it’s weighting automatically.
iShares XEQT ETF can be a viable alternative if you also want exposure to Canadian stocks.
You can read my full iShares XEQT review here to find out more.
VGRO is Vanguard’s Growth ETF portfolio. It consists of several ETFs offered by Vanguard.
There are two primary differences between iShares XAW ETF and VGRO. The first is that VGRO offers a more conservative option, as it has an 80/20 split between equity and fixed-income securities.
The second difference is that it also provides you with exposure to Canadian securities.
You can read my full Vanguard VGRO review here to find out more.
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iShares XAW ETF is excellent if you are looking for global exposure outside of Canada, with a heavy US emphasis.
It’s a great standalone ETF if you’re looking for equity exposure, or you can also combine it with a bond ETF.
Take a look at other iShares ETFs here if you’re still unsure what to pick.
