iShares XEU ETF Review 2022: Invest in European Equity Markets

Looking to invest in Europe?

An ETF like iShares XEU might be suitable for you.

In this iShares XEU ETF review, I will discuss what you need to know about the all-equity ETF to see if it’s a good fit for you.

Our Verdict
BlackRock IShares XEU ETF Review 2021
9/10Our Score

iShares XEU ETF

All-Equity Exchange-Traded Fund

BlackRock iShares XEU is an exchange-traded fund (ETF) that provides you exposure to a broad range of small-, mid-, and large-cap equities from developed market countries across Europe.

Pros
  • Offers exposure to a broad range of equities from developed markets across Europe
  • Grants convenient access to European equities in a single fund
  • Provides significant international diversity to your portfolio
Cons
  • Can be volatile if global equity markets are volatile

What Is BlackRock iShares XEU MSCI Europe IMI Index ETF?

BlackRock iShares XEU ETF is an exchange-traded fund (ETF) designed to replicate the MSCI Europe Investable Market Index’s performance, net of expenses.

BlackRock iShares XEU is an all-equity ETF that allocates almost all of its funds to a basket of equity securities. It is classified as a medium-risk investment.

XEU effectively follows the performance of a broad range of small-, mid-, and large-cap equity securities across 15 developed markets across Europe.

XEU.TO is currently trading at close to $21.9.

XEU Key Facts

As of June 30, 2022:

  • Ticker Symbol: XEU.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $328 Million
  • MER: 0.28%
  • 12-Month Trailing Yield: 3.35%
  • Currency Traded: CAD
  • Registered Accounts Availability: Yes

iShares XEU ETF MER and Fees

iShares XEU ETF has a Management Expense Ratio (MER) of 0.28%, making it costlier than many other ETFs offered by BlackRock iShares.

Its MER is still significantly lower than any mutual fund product that provides investors with similar features and benefits. Since the average mutual fund fees can be 2% or higher, ETFs offering lower MERs—like iShares XEU—is a crucial reason why many Canadians have preferred ETFs over mutual funds in recent years.

iShares XEU ETF Performance and Returns

iShares XEU ETF allocates its funds only to equity securities that are diversified across developed markets in Europe.

Here is the growth of a hypothetical $10,000 if you had invested since XEU’s 2014 inception:

As of June 30, 2022:

 1y3y5y10yIncept.
Average Annual Return (%)-15.440.832.004.02
Benchmark (%) -15.570.791.963.95
Source: Blackrock.com

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

iShares XEU ETF Dividend Yield

iShares XEU provides its investors with returns through capital gains.

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

  • 12-month trailing yield: 3.40%
  • Distribution yield: 4.23%
  • Dividend schedule: Semi-Annual

What Does BlackRock iShares XEU ETF Invest In?

iShares XEU is an all-equity ETF that diversifies its asset allocation across several sectors and market capitalizations from 15 developed economies across Europe.

Hence, the ETF can reflect the performance of the European equity markets based on the performance of stocks from different developed market countries in Europe.

The developed market countries represented in the underlying index for iShares XEU ETF include Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the U.K.

iShares XEU ETF Asset Allocation

As of July 14, 2022, iShares XEU ETF has allocated 99.13% of its funds to mostly international equities. It holds the remaining assets in cash.

Asset ClassNetShortLongCat.Index
Canadian Equity0.000.000.000.070.00
U.S. Equity1.360.001.361.701.34
International Equity97.770.0097.7795.7998.39
Fixed Income0.000.000.000.000.00
Other0.220.000.220.080.27
Cash0.650.000.653.250.00
Source: Morningstar.com

iShares XEU Top Holdings

Here is XEU’s top 10 holdings

As of July 13, 2022:

NameSectorWeight (%)
NESTLE SAConsumer Staples3.33
ROCHE HOLDING PAR AGHealth Care2.37
ASTRAZENECA PLCHealth Care2.06
NOVO NORDISK CLASS BHealth Care1.88
NOVARTIS AGHealth Care1.85
SHELL PLCEnergy1.85
ASML HOLDING NVInformation Technology1.84
LVMHConsumer Discretionary1.72
HSBC HOLDINGS PLCFinancials1.29
TOTALENERGIESEnergy1.23
Source: Blackrock.com

iShares XEU Sector Weighting

As of July 13, 2022, its most significant asset allocation is towards the health care sector at 15.76%. Its second most significant sector exposure is towards financial services at 15.62%, while the industrials sector comes in third at a 15.27% weighting. Its lowest sector weighting is towards the real estate sector at 2.14%.

TypeFund (%)
Health Care15.76
Financials15.62
Industrials15.27
Consumer Staples12.79
Consumer Discretionary9.98
Materials6.91
Information Technology6.89
Energy5.60
Utilities4.25
Communication4.15
Real Estate2.14
Cash and/or Derivatives0.64
Other0.00
Source: Blackrock.com

iShares XEU ETF Geographic Breakdown

XEU it allocates a big portion of its funds to UK, France, Switzerland, and Germany companies.

As of July 13, 2022,

TypeFund (%)
United Kingdom25.56
France16.03
Switzerland15.52
Germany11.37
Sweden6.05
Netherlands5.95
Denmark4.27
Italy3.74
Spain3.68
Belgium1.72
Finland1.69
Norway1.66
Cash and/or Derivatives0.64
Other2.11
Source: Blackrock.com

iShares XEU Risk Indicator

XEU is a medium risk ETF:

Source: Blackrock.com

iShares XEU ETF vs. Other ETFs

iShares XEU ETF vs. iShares XIU ETF

iShares XIU is another all-equity ETF offered by BlackRock Canada.

XIU does not track the performance of the equity markets of developed market countries in Europe. Instead, it follows the performance of the Canadian stock market. 

iShares XIU ETF holds the top 60 companies trading on the TSX in its portfolio based on market capitalization. On the other hand, iShares XEU ETF’s total holdings as of February 22, 2021, include 1,278 companies, therefore providing far greater diversity across different equities and countries

iShares XEU ETF vs. iShares XEH ETF

iShares XEH is another all-equity ETF offered by BlackRock Canada that tracks equity securities’ performance in the developed market countries across Europe.

iShares XEH has only one holding – iShares XEU ETF itself. Hence, its holdings are similar to iShares XEU ETF.

The primary similarity between iShares XEU ETF and iShares XEH ETF is that it tracks the same equity securities’ performance. The main difference is that XEH provides investors with returns hedged to the Canadian dollar.

iShares XEH ETF can be a viable alternative to iShares XEU ETF if you want to track the same equity securities’ performance without the volatility of currency exchange rates affecting your CAD returns.

How to Buy ishares XEU 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 XEU ETF a Good Investment for You?

iShares XEU ETF is a medium-risk investment that invests mainly in European stocks.

If you’re looking to get European exposure in your portfolio, then XEU is a solid choice.

Not sure which ETF to choose still? Check out this list of iShares all-in-one ETFs.

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