iShares XDV Review 2022: ETF for Monthly Income

Looking to invest in reliable, dividend-paying Canadian stocks?

An ETF like iShares XDV might be something for you to consider.

In this iShares XDV ETF review, let’s see if it’s a good choice for you.

Our Verdict
IShares XDV ETF Review 2021
9/10Our Score

iShares XDV

All-Equity Exchange-Traded Fund

BlackRock iShares XDV is an Exchange-Traded Fund (ETF) that provides you with exposure to a basket of Canadian stocks that provide you with regular, monthly dividend income.

Pros
  • Provides you with diversified exposure to 30 of the highest-yielding Canadian companies
  • Allows you to earn regular, monthly dividend income from Canadian stocks
  • Portfolio of high-yielding dividend stocks
Cons
  • High MER

What Is iShares Canadian Select Dividend Index XDV ETF?

iShares XDV is an exchange-traded fund designed to replicate the performance of the top 30 stocks in the Dow Jones Canada Total Market Index.

It seeks to provide its investors with regular income through high-yield, dividend-paying Canadian companies trading on the Toronto Stock Exchange (TSX).

It was launched in 2005 by BlackRock Canada and, therefore, has a significant performance history that you can track to determine its potential performance moving forward.

iShares XDV is a medium-risk investment opportunity that can cater to investors seeking regular monthly passive income through dividends.

XDV.TO is currently trading at close to $26.61.

XDV Key Facts

As of June 30, 2022:

  • Ticker Symbol: XDV.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $1.62 Billion
  • MER: 0.55%
  • 12-Month Trailing Yield: 4.38%
  • Currency Traded: CAD
  • Registered Accounts Availability: Yes

iShares XDV ETF MER and Fees

iShares XDV ETF has a high Management Expense Ratio (MER) of 0.55%, making it a costly product.

However, its MER is significantly lower than any mutual fund product that provides investors with similar features and benefits.

The average mutual fund fee can be 2% or higher. So, ETFs offering a lower MER than mutual funds products—like iShares XDV—is also a crucial reason why many Canadians prefer to invest in ETFs rather than mutual funds in recent years.

iShares XDV ETF Dividend Yield

iShares XDV’s dividend yield as of July 14, 2022:

  • 12-month trailing yield: 4.47%
  • Distribution yield: 4.16%
  • Dividend schedule: Monthly

iShares XDV ETF Performance and Returns

Here’s a hypothetical growth of $10,000 since XDV’s inception:

As of June 30, 2022:

 1y3y5y10yIncept.
Average Annual Return (%)-4.098.377.137.586.16
Benchmark (%) -3.558.997.748.256.75
Source: Blackrock.com

Go to the Blackrock website for real-time performance numbers of XDV.

What Does BlackRock iShares XDV ETF Invest In?

iShares XDV is an all-equity ETF that diversifies its asset allocation across several Canadian economic sectors.

iShares XDV ETF Asset Allocation

iShares XDV is an all-equity ETF. This means that it does not allocate any funds to bonds or other fixed-income securities.

As of July 14, 2022, iShares XDV ETF has allocated 99.25% of its funds to equity securities. It holds the remaining assets in cash.

Asset ClassInvestment (%)
Canadian Equity99.25
U.S. Equity0.00
International Equity0.00
Fixed Income0.00
Other0.00
Cash0.75
Source: Morningstar.com

iShares XDV ETF Top Holdings

As of July 14, 2022, Canadian Tire Ltd. is its most significant holding at a 7.18% weighting. It is followed closely by the Canadian Imperial Bank of Commerce at a 7.12% weighting. The Bank of Montreal is its third most significant holding, accounting for 6.42% of its fund allocation. 

TickerNameWeight (%)
CTC.ACANADIAN TIRE LTD CLASS A7.18
CMCANADIAN IMPERIAL BANK OF COMMERCE7.12
BMOBANK OF MONTREAL6.42
RYROYAL BANK OF CANADA6.18
BCEBCE INC5.06
TRPTC ENERGY CORP4.97
BNSBANK OF NOVA SCOTIA4.60
NANATIONAL BANK OF CANADA4.39
TDTORONTO DOMINION4.20
EMAEMERA INC4.03
Source: Blackrock.com

iShares XDV ETF Sector Weighting

As of July 14, 2022, its most significant asset allocation is towards the Financials sector at 52.87%. Its second most significant sector exposure is towards Utilities at 13.23%. The Communications sector comes in third at a 12.54% weight. On the other hand, its lowest sector weighting is towards Industrials at a 1.79% weighting.

TypeFund (%)
Financials52.87
Utilities13.23
Communication12.54
Consumer Discretionary7.18
Energy4.97
Materials4.72
Consumer Staples1.95
Industrials1.79
Cash and/or Derivatives0.75
Source: Blackrock.com

iShares XDV Risk Indicator

XDV is a medium risk ETF:

Source: Blackrock.com

iShares XDV ETF vs. Other ETFs

iShares XDV ETF vs. iShares XIU ETF

iShares XIU is an all-equity ETF offered by BlackRock Canada. It diversifies its asset allocation across several sectors of the Canadian economy, similar to iShares XDV ETF. 

However, unlike iShares XDV ETF, iShares XIU ETF invests its funds in the top 60 publicly traded Canadian companies based on the companies’ market capitalization. On the other hand, iShares XDV ETF focuses its asset allocation on companies sporting the highest dividend yields.

iShares XIU is also a low-cost ETF that you can consider due to its 0.18% MER, which is significantly different from iShares XDV ETF’s 0.55%.

iShares XIU ETF could be a viable alternative to iShares XDV ETF if you are interested in tracking the top 60 Canadian companies’ performance for long-term capital growth rather than regular passive income through dividends.

Read my full iShares XIU ETF review here to find out more.

iShares XDV ETF vs. iShares XIC ETF

iShares XIC is another all-equity ETF offered by BlackRock Canada that tracks equity securities’ performance in Canada.

iShares XIC ETF is one of the oldest ETFs in existence, and it sets the pace for other ETFs to follow. It allocates its funds to Canadian companies based on their market capitalization. It also provides you with a much broader exposure to the Canadian equity security market than iShares XDV ETF.

iShares XIC ETF provides you with more diversification to your portfolio than iShares XDV ETF because it invests in 219 companies compared to iShares XDV ETF’s 30 companies.

iShares XIC ETF is also an incredibly low-cost investment to consider for your portfolio due to its 0.06% MER, which is substantially lower than the 0.55% MER for iShares XDV ETF.

iShares XIC ETF could be a viable alternative to iShares XDV ETF if you want low-cost exposure to the entire Canadian stock market instead of dividend income.

Read my full iShares XIC ETF review here to find out more.

How to Buy BlackRock iShares XDV in Canada

The cheapest way to buy ETFs is from discount brokers. My top choices in Canada are:

Readers Choice
Qtrade
Qtrade
  • 105 commission-free ETFs to buy and sell
  • Excellent customer service
  • Top-notch market research tools
  • Easy-to-use and stable platform 
Low Fees
Wealthsimple Trade
Wealthsimple Trade
  • Stock and ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable fintech company
  • Fractional shares available
Well-Rounded
Questrade
Questrade
  • ETF buys have $0 trading fees
  • Excellent market research tools
  • Most types of registered accounts available

To learn more, check out my full breakdown of the best trading platforms in Canada.

Is iShares XDV ETF a Good Investment for You?

If you’re looking to invest in dividend stocks but don’t want to manage your own portfolio, XDV is an ok choice for you.

The MER might be a tad too high, though.

If you’re looking for other dividend ETF options, check out this list.

Photo of author
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.

Check Out These Posts:

Leave a Comment