iShares XBAL Review 2021: Balanced Growth All-In-One ETF Portfolio

Are you interested in investing in a portfolio of securities with reduced exposure to risk? Exchange-traded funds (ETFs) provide you with a low-cost opportunity to invest in a basket of stocks aligned with particular investment goals. 

All-in-one ETF portfolios are ETFs that consist of several underlying ETFs that offer further diversification to investors.

Balanced portfolios like the iShares Core Balanced ETF portfolio (XBAL) are suitable for investors with moderate risk tolerance, provide you with capital preservation, and relatively lower volatility in a turbulent market.

Our Verdict
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BlackRock iShares XBAL

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.

Pros of BlackRock iShares XBAL

  • Low MER.
  • Easy to purchase.
  • One-fund-solution with automatic rebalancing.

Cons of BlackRock iShares XBAL

  • Does not offer a truly balanced fixed-income to equity securities ratio.

What is iShares XBAL ETF Portfolio?

According to BlackRock, its iShares Core Balanced ETF portfolio is designed to provide investors with long-term capital growth and income. It traditionally 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.

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 in my list of the best all-in-one ETFs in Canada.

What does iShares XBAL Invest in?

iShares XBAL is traditionally a balanced portfolio that offers investors with 60% exposure to stocks and 40% exposure to bonds. However, as of January 7, 2021, 99.88% of its equity securities comprise equity securities. 

It is possible that the fund management has taken it upon itself to provide a boost to investor returns by capitalizing on the current bullish market trends and align it with its goals to deliver capital growth.

In terms of its exposure to different sectors of the economy, iShares XBAL invests heavily in the tech sector with Apple Inc., Microsoft Corp., and Amazon.com Inc. comprising its top three holdings as of January 8, 2020.

iShares XBAL Asset Allocation

Typically, balanced all-in-one ETF portfolios provide investors with a balanced exposure to fixed-income to equity securities. However, as of January 7, 2021, iShares XBAL currently provides exposure to 99.88% equity securities and 0.12% to cash and/or derivatives.

iShares XBAL Top Holdings

iShares XBAL is a collection of various ETFs managed by BlackRock Fund Management. Its holdings consist of highly diverse ETFs aligning with various investment goals and across multiple markets. 

It’s most significant holdings are iShares Core S&P Total US Stock ETF at 29.45% and the iShares Core CAD Universal Bond Index ETF at 23.13%.

In terms of the underlying companies within the portfolio, Apple Inc. is the most significant holding at 1.62%, Microsoft Corp. is second at 1.28%, and Amazon.com Inc. is third at 1.06%.

iShares XBAL Sector Weighting

BlackRock iShares XBAL provides its investors with highly diversified exposure to different sectors of the global economy. The financial services industry comprises 17.97% of its sector weighting. 

The technology sector comes in at a close second, accounting for 16.85%, while its exposure to the real estate sector is the lowest at 3.59% as of January 8, 2020.

iShares XBAL MER and Fees

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 Performance and Returns

iShares XBAL has generally enjoyed a decent performance over the years. While it took a tumble amid the February and March bear market in 2020, it has recovered and gone past its pre-pandemic performance, providing its investors with excellent returns on their investments.

iShares XBAL vs. Other ETFs

iShares XBAL vs. Vanguard VBAL

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 XBAL vs. iShares XAW

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.

How to Buy BlackRock iShares XBAL ETF in Canada

My two favourite ways to buy ETFs in Canada are the following:

  • Questrade – Canada’s leading discount broker, I use Questrade to trade most of my stocks. It has a desktop and mobile trading platform. All Canadian ETF purchases are commission-free, but be aware that selling ETFs will cost a small fee. With this special offer, you can also get $50 of commission-free stock trades here.
  • Wealthsimple Trade – Better known as a robo-advisor, Wealthsimple has now released this fantastic trading platform that now comes in both desktop and mobile versions. All Canadian stock and ETF trades are commission-free. Get a $10 signup bonus when you sign up here

Is iShares XBAL a Good Investment For You?

Balanced portfolios like the iShares Core Balanced ETF portfolio (XBAL) are suitable for investors with moderate risk tolerance, provide you with capital preservation, and relatively lower volatility in a turbulent market.

iShares XBAL provides you reduced risk by balancing equity securities with fixed-income securities, but that does not mean it will never let you lose money. 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, 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. If you are inclined to capitalize on the market movements without too much risk to your capital, it could be an excellent investment for you to consider.

iShares XBAL review

iShares XBAL Review 2021: Balanced Growth All-In-One ETF Portfolio

The BlackRock iShares Core Balanced ETF Portfolio (XBAL) is an all-in-one ETF portfolio that can provide you with a balanced exposure to a diverse basket of equity and fixed-income securities.

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Editor's Rating:
4.8
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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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