Creating a portfolio of equity securities that diversifies your asset allocation is not easy. It requires a lot of hard work, research, time, and an expert understanding of financial markets.
If you want to capitalize on the returns of top Canadian companies trading on the Toronto Stock Exchange (TSX), an ETF like iShares XIU might be suitable for you.
In this iShares XIU ETF review, I will help you determine whether it aligns with your investment goals.
All-Equity Exchange-Traded Fund
BlackRock iShares XIU is an Exchange-Traded Fund (ETF) that provides you with exposure to the largest Canadian companies trading on the TSX.
- Is a low-cost ETF
- Is one of the largest and most liquid ETFs in Canada
- Is the one of the first ETFs in the world
- Is not as diversified as some other ETFs
BlackRock iShares XIU is an ETF designed to replicate the performance of the S&P/TSX 60 Index.
Professionally managed by BlackRock, a multinational investment management corporation, iShares XIU ETF is a medium-risk investment that caters to investors seeking exposure to top Canadian companies.
Launched in 1990, it is one of the first ETFs that marked the emergence of a viable alternative to mutual fund products.
There are several other all-equity ETFs in Canada that you can check out in my list of the best Canadian ETFs here. However, BlackRock iShares XIU follows the performance of the top 60 Canadian companies that are trading on the TSX based on their market capitalization.
XIU.TO is currently trading at close to $29.42.
XIU Key Facts
As of June 30, 2022:
- Ticker Symbol: XIU.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $830 Million
- MER: 0.20%
- 12-Month Trailing Yield: 2.19%
- Currency Traded: CAD
- Registered Accounts Availability: Yes
iShares XIU has a Management Expense Ratio (MER) of 0.18%, which is lower than several other ETFs with similar exposure to this index.
Its MER is also significantly lower than any mutual fund product that provides investors with similar features and benefits.
With the average mutual fund fees being at least 2%, low-MER ETFs like iShares XIU are also a crucial reason why many Canadians have preferred ETFs over mutual funds in recent years.
iShares XIU’s dividend yield as of July 12, 2022:
- 12-month trailing yield: 2.88%
- Distribution yield: 3.07%
- Dividend schedule: Quarterly
Here is the growth of a hypothetical $10,000 invested in iShares XIU since its inception:
As of June 30, 2022:
|Average Annual Return (%)||-2.55||8.62||8.33||8.74||7.25|
iShares XIU is an all-equity ETF, so its entire asset allocation is towards stocks that constitute the S&P/TSX 60 Index.
As of July 2022:
|RY||ROYAL BANK OF CANADA||Financials||8.22|
|BNS||BANK OF NOVA SCOTIA||Financials||4.10|
|CNR||CANADIAN NATIONAL RAILWAY||Industrials||3.93|
|CP||CANADIAN PACIFIC RAILWAY LTD||Industrials||3.90|
|BAM.A||BROOKFIELD ASSET MANAGEMENT INC CL||Financials||3.84|
|BMO||BANK OF MONTREAL||Financials||3.80|
|CNQ||CANADIAN NATURAL RESOURCES LTD||Energy||3.27|
|TRP||TC ENERGY CORP||Energy||2.98|
The ETF provides investors with exposure only to equity securities trading on the TSX. Its most significant asset allocation is towards the financial sector, with several Canadian banks making a substantial part of its top 10 assets.
As of Jul 12, 2022:
|Cash and/or Derivatives||0.35|
iShares XIU has a medium risk factor.
iShares XIC is another ETF that you can consider investing in if you want to track Canadian stock markets’ performance.
Because the top ten holdings for iShares XIC and iShares XIU are identical, you can get exposure to the same ten companies. Additionally, the weights in both ETFs are based on market capitalization.
However, there’s a significant difference between the two: iShares XIC holds over 200 companies in the portfolio. Compare that with the 60 companies for iShares XIU, and you can count on a lot more diversity for XIC.
Hence, iShares XIC could be a viable alternative to iShares XIU if you want greater exposure to a diversified basket of Canadian stocks.
Horizons HXT is another ETF to consider if you want to track the Canadian stock markets’ performance.
As an ETF product offered by Horizons, it also seeks to replicate the performance of the same underlying index as iShares XIU. Hence, the ETF’s holdings are similar to iShares XIU.
Horizons HXT also has a substantially lower MER of 0.03%. Lastly, Horizons HXT’s inception in 2010 means that it is significantly newer than iShares XIU.
iShares XIU is a medium-risk investment asset that you can consider adding to your portfolio.
Its focus on the financial and tech sectors and the backing of proven equity securities show that it is a reliable investment for investors seeking long-term capital growth.
It’s a great way to get exposure to the TSX index in your DIY ETF portfolio.
The cheapest way to buy ETFs is from discount brokers. My top choices in Canada are:
- 105 commission-free ETFs to buy and sell
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- Stock and ETF buys and sells have $0 trading fees
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To learn more, check out my full breakdown of the best trading platforms in Canada.
iShares XIU provides an easy way for you to invest in 60 of the top Canadian companies without breaking a sweat.
Compared to a mutual fund that tracks the TSX index, I would choose the XIU ETF any day over that.
Learn more about iShares ETFs here.