Want to invest in American stocks without the hassle of picking them yourself?
A US Equity ETF might be what you’re looking for.
This iShares XSP ETF review will go over if it’s the right investment for you to get exposure to the US stock market.
All-Equity Exchange-Traded Fund
BlackRock iShares XSP is an exchange-traded fund (ETF) that provides you with exposure to a basket of the largest 500 U.S. stocks that are hedged against the Canadian dollar.
- Offers diversified exposure to the top 500 publicly-traded companies in the U.S.
- Is designed to be a long-term core holding
- Low MER
- Can find other S&P 500 ETFs for slightly cheaper
BlackRock iShares XSP is an exchange-traded fund designed to replicate the performance of the S&P 500 (Hedged to Canadian dollars).
XSP invests in the iShares Core S&P 500 ETF (IVV) as its largest holding.
Launched in 2001 by BlackRock Canada, iShares XSP ETF has two decades of performance history that you can evaluate.
It tracks the performance of the top 500 companies that are trading in the U.S. equity security market and are diversified across many different sectors.
XSP.TO is currently trading at close to $51.91.
XSP Key Facts
As of June 30, 2022:
- Ticker Symbol: XSP.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $7.12 Billion
- MER: 0.10%
- 12-Month Trailing Yield: 1.29%
- Currency Traded: CAD
- Number of Underlying Holdings: 503 (as of July 15, 2022)
- Registered Accounts Availability: Yes
iShares XSP ETF is a very low-cost ETF that you can consider adding to your portfolio, given its low Management Expense Ratio (MER) of just 0.10%.
Its MER is also significantly lower than any mutual fund product that provides investors with similar features and benefits. The average mutual fund fee is at least 2%.
iShares XSP’s dividend yield as of July 14, 2022:
- 12-month trailing yield: 1.29%
- Distribution yield: 1.15%
- Dividend schedule: Semi-Annual
Here is the performance of a hypothetical $10,000 since the inception of iShares XSP:
As of June 30, 2022:
| 1y | 3y | 5y | 10y | Incept. | |
|---|---|---|---|---|---|
| Average Annual Return (%) | -11.42 | 8.95 | 9.54 | 11.83 | 4.62 |
| Benchmark (%) | -11.20 | 9.37 | 9.99 | 12.33 | 5.22 |
iShares XSP ETF reflects the top 500 companies’ performance in the U.S. equity security markets.
This section of my reviews typically discusses the asset allocation split between fixed-income and equity securities for the ETF.
As of July 14, 2022, iShares XSP has been allocated into the following asset classes:
| Asset Class | Net (%) |
|---|---|
| Canadian Equity | 0.00 |
| U.S. Equity | 100.56 |
| International Equity | 1.03 |
| Fixed Income | 0.00 |
| Other | 0.00 |
| Cash | -1.59 |
iShares XSP does not hold any stocks directly. Instead, the ETF invests in iShares Core S&P 500 ETF (IVV) as its primary holding.
| Ticker | Name | Sector | Weight (%) |
|---|---|---|---|
| IVV | ISHARES CORE S&P 500 ETF | Financials | 100.86 |
| USD | USD/CAD | Cash and/or Derivatives | 0.05 |
| USD | USD/CAD | Cash and/or Derivatives | 0.05 |
| USD | USD CASH | Cash and/or Derivatives | 0.05 |
| CAD | CAD CASH | Cash and/or Derivatives | 0.04 |
| USD | USD/CAD | Cash and/or Derivatives | 0.00 |
| USD | USD/CAD | Cash and/or Derivatives | 0.00 |
| USD | USD/CAD | Cash and/or Derivatives | 0.00 |
| USD | USD/CAD | Cash and/or Derivatives | 0.00 |
| USD | USD/CAD | Cash and/or Derivatives | 0.00 |
Let’s take a closer look at iShares IVV’s holdings to get a better idea of the top companies.
As of July 15, 2022, Apple Inc. is its most significant holding at a 7.13% weighting. It is followed closely by Microsoft Corp. at 5.93%. Amazon.com, Inc. is its third most significant holding, accounting for 3.07% of its fund allocation.
This shows that most of the iShares XSP holdings belong to the tech sector. In fact, five of its top 10 holdings belong to the tech and communication sectors.
| Ticker | Name | Weight (%) | Sector |
|---|---|---|---|
| AAPL | APPLE INC | 7.13 | Information Technology |
| MSFT | MICROSOFT CORP | 5.93 | Information Technology |
| AMZN | AMAZON COM INC | 3.07 | Consumer Discretionary |
| GOOGL | ALPHABET INC CLASS A | 2.08 | Communication |
| GOOG | ALPHABET INC CLASS C | 1.92 | Communication |
| TSLA | TESLA INC | 1.87 | Consumer Discretionary |
| BRKB | BERKSHIRE HATHAWAY INC CLASS B | 1.56 | Financials |
| UNH | UNITEDHEALTH GROUP INC | 1.53 | Health Care |
| JNJ | JOHNSON & JOHNSON | 1.45 | Health Care |
| NVDA | NVIDIA CORP | 1.22 | Information Technology |
As of July 14, 2022, here is what the sectors iShares XSP is invested in:
| Type | Fund (%) |
|---|---|
| Information Technology | 27.89 |
| Health Care | 15.23 |
| Consumer Discretionary | 11.09 |
| Financials | 10.73 |
| Communication | 9.00 |
| Industrials | 7.76 |
| Consumer Staples | 7.14 |
| Energy | 4.16 |
| Utilities | 3.13 |
| Real Estate | 2.93 |
| Materials | 2.53 |
| Other | 0.03 |
| Cash and/or Derivatives | -1.63 |
XSP is a medium risk ETF:
iShares XIU is an equity ETF offered by BlackRock Canada. It diversifies its asset allocation across several Canadian sectors, just like iShares XSP ETF diversifies across several industries in the U.S.
Unlike iShares XSP, however, iShares XIU ETF invests its funds in the top 60 publicly-traded Canadian companies based on market capitalization.
On the other hand, iShares XSP has a broader focus, concentrating on the top 500 companies in the U.S.
iShares XIU also has a higher cost, with a 0.18% MER compared to the 0.10% MER of iShares XSP.
Overall, iShares XIU ETF can be a viable alternative to iShares XSP if you are interested in tracking the top 60 Canadian companies’ performance rather than focusing on the U.S. equity security market.
Read my full iShares XIU ETF review here to find out more.
iShares XIC is another equity ETF offered by BlackRock Canada that tracks the performance of Canadian equity securities. It is one of the oldest ETFs in existence, and it sets the pace for other ETFs to follow.
One thing you should note, however, is that iShares XIC ETF does not provide as much diversification as iShares XSP ETF because it invests in 219 companies compared to iShares XSP’s 500 companies.
Nonetheless, iShares XIC ETF is an incredibly low-cost investment you should consider for your portfolio. It has a 0.06% MER, which is lower than the 0.10% MER of iShares XSP ETF.
iShares XIC can be a viable alternative to iShares XSP ETF if you want low-cost exposure to the entire Canadian stock market instead of the U.S. equity security markets.
Read my full iShares XIC ETF review here to find out more.
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If you’re looking to invest in the top 500 companies in the U.S quickly and effectively, iShares XSP is a good choice for you.
If you really want to cut your MERs, check out these S&P 500 ETFs for some cheaper options.
