iShares XEI ETF Review 2022: Invest in High-Dividend Canadian Stocks

Looking to invest in Canadian dividend-paying stocks?

A better option might be to purchase a Canadian dividend ETF.

In this iShares XEI review, let’s go over whether or not this dividend-paying investment is right for you.

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

iShares XEI ETF

All-Equity Exchange-Traded Fund

BlackRock iShares XEI is an Exchange-Traded Fund (ETF) that provides you with exposure to a basket of income-generating equities trading on the TSX.

Pros
  • Is a low-cost ETF
  • Exposure to a basket of Canadian dividend stocks
Cons
  • Hands-on investors might think the MER isn’t worth it

What Is BlackRock iShares XEI ETF?

iShares XEI is an exchange-traded fund designed to replicate the performance of the S&P/TSX Composite High Dividend Index.

As an all-equity ETF that allocates almost all of its funds to a basket of equity securities.

It’s a medium-risk investment for investors seeking a portfolio of dividend stocks.

Launched in 2011 by BlackRock Canada, iShares XEI ETF has a decade-long performance that you can refer to. It follows the performance of some of the top dividend-paying Canadian stocks trading on the Toronto Stock Exchange (TSX).

XEI.TO is currently trading at close to $24.65.

XEI Key Facts

As of June 30, 2022:

  • Ticker Symbol: XEI.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $1.26 Billion
  • MER: 0.22%
  • 12-Month Trailing Yield: 3.86%
  • Currency Traded: CAD
  • Registered Accounts Availability: Yes

iShares XEI ETF MER and Fees

iShares XEI has a Management Expense Ratio (MER) of 0.22%, making it costlier than some other ETFs offered by BlackRock.

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

With the average mutual fund fees being 2% or higher, ETFs offering lower MERs – like iShares XEI – is also a crucial reason why many Canadians prefer ETFs over mutual funds in recent years.

iShares XEI ETF Dividend Yield

iShares XEI’s dividend yield as of July 13, 2022:

  • 12-month trailing yield: 3.92%
  • Distribution yield: 4.00%
  • Dividend schedule: Monthly

iShares XEI ETF Performance and Returns

Here is the growth of a hypothetical $10,000 since XEI’s inception:

As of June 30, 2022:
 1y3y5y10yIncept.
Average Annual Return (%)9.4911.308.518.097.00
Benchmark (%) 9.7811.598.758.417.34
Source: Blackrock.com

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

What Does BlackRock iShares XEI Invest In?

iShares XEI is an all-equity ETF that diversifies its asset allocation across 75 dividend stocks from several Canadian economic sectors.

ETF reflects the performance of the top 75 dividend-paying stocks trading on the TSX.

iShares XEI focuses primarily on the financial, energy, and utility sectors.

iShares XEI ETF Asset Allocation

As of July 14, 2022, iShares XEI ETF has allocated 99.64% of its funds to equity securities. It holds the remaining assets in cash.

Asset ClassInvestment (%)
Canadian Equity95.94
U.S. Equity3.70
International Equity0.00
Fixed Income0.00
Other0.00
Cash0.36
Source: Morningstar.com

iShares XEI ETF Top Holdings

As of July 14, 2022, BCE INC. is its most significant holding at a 5.32% asset allocation. It is followed closely by Enbridge INC. at a weighting of 5.15%. TC Energy Corp is its third most significant holding at 5.13%.

TickerNameSectorWeight (%)
BCEBCE INCCommunication5.32
ENBENBRIDGE INCEnergy5.16
TRPTC ENERGY CORPEnergy5.13
RYROYAL BANK OF CANADAFinancials5.12
PPLPEMBINA PIPELINE CORPEnergy4.74
TDTORONTO DOMINIONFinancials4.71
BNSBANK OF NOVA SCOTIAFinancials4.70
TTELUS CORPCommunication4.56
BMOBANK OF MONTREALFinancials4.37
ABXBARRICK GOLD CORPMaterials4.24
Source: Blackrock.com

iShares XEI ETF Sector Weighting

As of July 13, 2022, its most significant asset allocation is towards the financial sector at 30.34%. Its second most significant sector exposure is towards the energy industry at 27.57%, while utilities come in third at a 14.46% weighting. Its lowest sector weighting is towards the healthcare sector at 0.40%.

TypeFund (%)
Financials30.34
Energy27.57
Utilities14.46
Communication12.10
Materials5.72
Real Estate4.50
Consumer Discretionary3.42
Industrials0.94
Health Care0.40
Cash and/or Derivatives0.35
Consumer Staples0.19
Source: Blackrock.com

iShares XEI Risk Indicator

XEI is a medium risk ETF:

Source: Blackrock.com

iShares XEI vs. Other ETFs

iShares XEI ETF vs. iShares XIU ETF

iShares XIU is another all-equity ETF offered by BlackRock Canada that you can consider adding to your portfolio.

Like iShares XEI ETF, iShares XIU ETF also tracks equity securities trading performance on the TSX. However, iShares XIU ETF tracks the performance of only the top 60 Canadian companies.

iShares XIU ETF holds the top 60 companies trading on the TSX in its portfolio based on market capitalization. Meanwhile, iShares XEI ETF has 75 of the best dividend-paying stocks trading on the TSX.

With this additional number of holdings, iShares XEI ETF provides more diversification for investors within the TSX.

iShares XIU ETF can be a viable alternative to iShares XEI ETF if you want exposure to a portfolio of top Canadian stocks based on market capitalization and don’t care as much about dividends.

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

iShares XEI ETF vs. iShares XEU ETF

iShares XEU is another all-equity ETF offered by BlackRock Canada. It tracks the performance of equity securities in developed market countries across Europe.

Unlike iShares XEI ETF, iShares XEU ETF does not invest in any Canadian equity securities. It also diversifies its asset allocation across several countries, including the UK, France, Germany, Switzerland, Sweden, the Netherlands, and more.

iShares XEU ETF offers much more geographic diversity to your portfolio and has almost 1,300 stocks in its holdings compared to the 75 holdings of iShares XEI ETF. 

Hence, iShares XEU ETF can be a viable alternative to iShares XEI ETF if you want to track the performance of some of the top equity securities trading worldwide.

Read my full iShares XEU review here to find out more.

How to Buy iShares XEI ETF 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 XEI ETF a Good Investment for You?

iShares XEI ETF’s performance is based on some of the top dividend-paying stocks in Canada. These equity securities are high-yield, dividend-paying stocks with an extensive history of disbursing reliable payouts.

It’s an excellent choice if your goal is to invest in dividend-paying companies in Canada.

If you want to learn about other options, check out these top dividend ETFs in Canada.

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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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