Looking for an easy way to invest in ETFs without the hassle of building your own portfolio?
Consider all-in-one ETF portfolios, which have grown extremely popular in Canada in the last few years.
This iShares XBAL review will shed some light on whether or not this balanced growth ETF is right for you.
ETF portfolio
The BlackRock iShares Core Balanced ETF Portfolio XBAL is an all-in-one ETF portfolio that provides investors with a lower-risk exposure to a diverse basket of securities.
- Low MER
- Easy to purchase
- One-fund solution with automatic rebalancing
- Well-diversified, with over 20,000 underlying stocks
- Might be too heavily tech-weighted
According to BlackRock, its iShares Core Balanced ETF portfolio is designed to provide investors with long-term capital growth and income.
It offers a low- to medium-risk to your portfolio with a 60-40 split between stocks and bonds for its asset allocation.
Comparable to the likes of Vanguard VBAL and BMO ZBAL, iShares XBAL is a low-cost all-in-one ETF portfolio that is eligible for both registered and non-registered accounts.
XBAL.TO is currently trading at close to $26.84.
XBAL Key Facts
As of June 30, 2022:
- Ticker Symbol: XBAL.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $10.8 Billion
- MER: 0.18%
- 12-Month Trailing Yield: 2.86%
- Currency Traded: CAD
- Number of underlying stocks: 20524
- Registered Accounts Availability: Yes
How do All-In-One Portfolios Work?
All-in-one ETFs are essentially a portfolio of several ETFs designed to make diversified and passive investing easier for investors.
Before all-in-one ETFs came around, it was much more difficult to make an ETF portfolio. You would have to purchase several ETFs yourself and rebalance them to align with your investment goals and risk tolerance based on each ETF’s performance.
You can find out more details about all-in-one ETFs here.
iShares XBAL has a Management Expense Ratio (MER) that is significantly low at 0.20%.
Considering the charges for mutual fund products being over 2% on average, it is easy to see why many Canadians are choosing all-in-one ETF portfolios like iShares XBAL over mutual funds.
iShares XBAL’s dividend yield as of June 30, 2022:
- 12-month trailing yield: 2.19%
- Distribution yield: 3.08%
- Dividend schedule: Quarterly
Here is the hypothetical growth of $10,000 if you had invested it since XBAL’s inception:
Go to the Blackrock website for real-time performance numbers of XBAL.
iShares XBAL is traditionally a balanced portfolio that offers investors 60% exposure to stocks and 40% exposure to bonds. You can see that it sticks close to that amount here:
As of July 12, 2022:
Allocations are subject to change
| Type | Fund |
|---|---|
| Equity | 59.16 |
| Fixed Income | 40.82 |
| Cash and/or Derivatives | 0.03 |
Source: Blackrock.com
iShares XBAL invests in various ETFs managed by BlackRock Fund Management.
Its most significant holding is in iShares Core S&P Total US Stock ETF (ITOT) as of July 11, 2022.
| Ticker | Name | Sector | Weight (%) |
|---|---|---|---|
| ITOT | ISHARES CORE S&P TOTAL U.S. STOCK | Corporates | 27.27 |
| XBB | ISHS CORE CAD UNIV BND IDX ETF (CA | Corporates | 25.69 |
| XIC | ISHARES S&P/TSX CAPPED COMPOSITE | Corporates | 15.14 |
| XEF | ISHARES MSCI EAFE IMI INDEX | Corporates | 14.21 |
| XSH | iShares Core CAD ST Cor Bd Index | Corporates | 6.63 |
| GOVT | ISHARES US TREASURY BOND ETF | Treasury | 4.21 |
| USIG | ISHARES BROAD USD INVESTMENT G | Corporates | 4.03 |
| IEMG | ISHARES CORE MSCI EMERGING MARKETS | Corporates | 2.79 |
| USD | USD CASH | Cash and/or Derivatives | 0.07 |
| CAD | CAD CASH | Cash and/or Derivatives | 0.03 |
XBAL Aggregate Underlying Holdings
The top holdings are heavily dominated by tech and finance, as seen here (As of July 11, 2022):
| Ticker | Name | Weight (%) | Sector |
|---|---|---|---|
| AAPL | APPLE INC | 1.58 | Information Technology |
| MSFT | MICROSOFT CORP | 1.40 | Information Technology |
| RY | ROYAL BANK OF CANADA | 1.00 | Financials |
| TD | TORONTO DOMINION | 0.82 | Financials |
| AMZN | AMAZON COM INC | 0.69 | Consumer Discretionary |
| ENB | ENBRIDGE INC | 0.61 | Energy |
| BNS | BANK OF NOVA SCOTIA | 0.50 | Financials |
| GOOGL | ALPHABET INC CLASS A | 0.49 | Communication |
| CP | CANADIAN PACIFIC RAILWAY LTD | 0.48 | Industrials |
| CNR | CANADIAN NATIONAL RAILWAY | 0.48 | Industrials |
BlackRock iShares XBAL provides its investors with highly diversified exposure to different sectors of the global economy.
Here is the breakdown, as of Jul 12, 2022:
| Sectors | Investment % |
|---|---|
| Basic Materials | 6.07 |
| Consumer Cyclical | 9.30 |
| Financial Services | 19.07 |
| Real Estate | 3.59 |
| Communication Services | 6.86 |
| Energy | 7.75 |
| Industrials | 11.28 |
| Technology | 15.35 |
| Consumer Defensive | 6.69 |
| Healthcare | 10.40 |
| Utilities | 3.62 |
iShares XBAL has a low-to-medium risk factor.
Vanguard VBAL is Vanguard’s Balanced All-In-One ETF portfolio that is comparable to iShares XBAL in terms of what it invests in and its investment goals.
However, VBAL provides investors with lower exposure to US stocks than XBAL and more exposure to the Canadian equity market. Additionally, VBAL has a higher MER of 0.25%.
Read my full Vanguard VBAL Review here to find out more.
iShares XAW is another ETF portfolio offered by BlackRock. Unlike iShares XBAL, XAW is an ETF that invests primarily in equity securities. Additionally, XAW does not provide investors with exposure to the Canadian equity market.
If you are looking to invest in a diverse selection of stocks without any Canadian stocks in your portfolio, you can consider investing in iShares XAW instead.
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Balanced portfolios like the iShares Core Balanced ETF portfolio (XBAL) are suitable for investors with moderate risk tolerance, and provide you with capital preservation, and relatively lower volatility in a turbulent market.
iShares XBAL provides you with reduced risk by balancing equity securities with fixed-income securities, but that does not mean there is no risk.
Though compared to aggressive or high-growth portfolios, XBAL can provide you with milder ups and downs.
If you are new to investing and want to get your feet wet in stock market investing, are close to retirement but want to grow your wealth, or just hate seeing too much volatility in your investment account, iShares XBAL could work out for you.
You will not have to manually rebalance the ETFs you invest in because the all-in-one ETF portfolio will automatically rebalance to align with its investing goals.
Conclusion
All-in-one ETF portfolios provide investors with a one-stop solution that takes the hassle out of investing.
Instead of choosing individual stocks or ETFs to align with your investment goals, you can allow the all-in-one ETF portfolio to handle it all for you.
The BlackRock iShares XBAL ETF portfolio is typically an excellent way for you to invest if you have a low to moderate risk tolerance.
Learn more about iShares all-in-one ETFs here.
