iShares XUS ETF Review 2022: Invest in the U.S S&P 500

Looking to invest in the U.S market? It’s not surprising, considering that American stocks have historically outperformed Canadian ones in the long run.

S&P 500 funds, like XUS ETF, offer a low-risk way to invest with minimal fees.

If you’re looking to round out your portfolio or add some diversity by buying American companies, read this full iShares XUS ETF review.

Our Verdict
IShares XUS ETF Review
10/10Our Score

iShares XUS ETF

All-Equity Exchange-Traded Fund

Available on the Toronto Stock Exchange, XUS tracks the S&P 500 Index at a low fee.

Pros
  • Diversified exposure
  • Holds its U.S. listed counterpart, IVV, to reduce transaction costs
  • Low cost
  • Highly liquid
Cons
  • Tech heavy

What Is iShares XUS ETF?

IShares XUS is part of the collection of exchange-traded funds offered by Blackrock at a low cost.

XUS is available on the Toronto Stock Exchange, and it tracks the S&P 500 index, which comprises of the 500 largest companies in the U.S.

XUS.TO is currently trading at close to $67.06.

XUS Key Facts

As of June 30, 2022:

  • Ticker Symbol: XUS.TO
  • Exchange: Toronto Stock Exchange
  • Assets Under Management: $4.13 Billion
  • MER: 0.10%
  • 12-Month Trailing Yield: 1.28%
  • Currency Traded: CAD
  • Number of Underlying Stocks: 503 (as of July 18, 2022)
  • Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available

What Is the MER for XUS ETF?

Here are the management fees associated with XUS, which are much lower compared to mutual funds:

  • Management Fee: 0.09%
  • Management Expense Ratio (MER): 0.10%

XUS Dividends

XUS pays out dividends semi-annually, quite different from one of its biggest competitors, Vanguard, which pays out quarterly dividends.

iShares XUS’ dividend yield as of July 15, 2022:

  • 12-month trailing yield: 1.24%
  • Distribution yield: 1.10%
  • Dividend schedule: Semi-Annual

iShares XUS ETF Performance and Returns

As seen here, the performance of XUS closely matches that of the benchmark S&P 500, which is why it’s a highly regarded fund to invest in.

The potential growth over the long term is another factor to consider when investing.

Here is the growth of a hypothetical $10,000 invested in iShares XUS since inception:

As of June 30, 2022:

 1y3y5y10yIncept.
Average Annual Return (%)-7.139.7610.7414.53
Benchmark (%) -7.309.5710.5614.32
Source: Blackrock.com

What Does BlackRock iShares XUS Invest In?

IShares XUS ETF Asset Allocation

As of July 15, 2022, iShares XUS has been allocated into the following asset classes:

Asset ClassInvestment
Canadian Equity0.00
U.S. Equity98.59
International Equity1.01
Fixed Income0.00
Other0.00
Cash0.40
Source: Morningstar.com

iShares XUS ETF Holdings

XUS differs from other funds as it has another of Blackrock’s ETFs (IVV) as one of its main holdings. IVV is the U.S. version of iShares Core S&P 500.

Combining it with other companies from the large-cap world, the top holdings add a diverse range of industry sectors, including finance, communication, and information technology.

As of July 18, 2022:

TickerNameSectorWeight (%)
IVVISHARES CORE S&P 500 ETFFinancials96.63
AAPLAPPLE INCInformation Technology0.23
MSFTMICROSOFT CORPInformation Technology0.19
AMZNAMAZON COM INCConsumer Discretionary0.10
USDUSD CASHCash and/or Derivatives0.07
GOOGLALPHABET INC CLASS ACommunication0.07
TSLATESLA INCConsumer Discretionary0.06
GOOGALPHABET INC CLASS CCommunication0.06
BRKBBERKSHIRE HATHAWAY INC CLASS BFinancials0.05
UNHUNITEDHEALTH GROUP INCHealth Care0.05
Source: Blackrock.com

iShares XUS ETF Aggregate Underlying Holdings

As of July 18, 2022, Apple Inc. is its most significant holding at a 6.98% weighting. It is followed closely by Microsoft Corp. at 5.87%. Amazon.com, Inc. is its third most significant holding, accounting for 3.07% of its fund allocation.

TickerNameWeight (%)
AAPLAPPLE INC6.98
MSFTMICROSOFT CORP5.87
AMZNAMAZON COM INC3.07
GOOGLALPHABET INC CLASS A2.03
GOOGALPHABET INC CLASS C1.87
TSLATESLA INC1.87
BRKBBERKSHIRE HATHAWAY INC CLASS B1.54
UNHUNITEDHEALTH GROUP INC1.51
JNJJOHNSON & JOHNSON1.42
NVDANVIDIA CORP1.25
Source: Blackrock.com

iShares XUS ETF Sector Weighting

As of July 15, 2022, its most significant asset allocation is towards the Information Technology sector at 27.30%.

Its second most significant sector exposure is towards health care at 15.01%. The consumer discretionary sector comes in third at a 10.85% weight.

TypeFund
Information Technology27.30
Health Care15.01
Consumer Discretionary10.85
Financials10.69
Communication8.85
Industrials7.58
Consumer Staples6.89
Energy4.08
Utilities3.01
Real Estate2.87
Materials2.48
Cash and/or Derivatives0.37
Other0.03
Source: Blackrock.com

iShares XUS Risk Indicator

iShares XUS has a medium risk factor.

Source: Blackrock.com

Is XUS Hedged?

In plain terms, hedging is a strategy employed to offset losses by taking the opposite position on a related asset. It’s done to reduce the risk of price movements associated with investments.

Currently, XUS is not a hedged fund. However, it is a part of a twin foreign index fund. These funds are each almost identical, except one is hedged, and one is not.

Learn more about hedged ETFs vs unhedged ETFs here.

XUS vs XSP

XSP is its twin and is hedged against currency fluctuations.

XSP tries to replicate the performance of the S&P 500 hedged to the Canadian Dollar index. In order for XSP to work in your favour, the value of the U.S. dollar needs to drop in relation to the Canadian dollar.

If the U.S. dollar were to rise while you have an investment hedged, you would see either a smaller gain or an expanded loss.

Often, hedged funds can be more expensive than non-hedged funds simply because of the management needed to monitor currency swings. However, XSP includes the same management fee and expense ratio as XUS, which is somewhat surprising to me.

IShares XUS ETF Vs. Other ETFs

XUS Vs IVV

IVV is the U.S. version of Blackrock’s iShares S&P 500 Index Fund. XUS is the Canadian version. While it’s possible to buy IVV, it’s only available in U.S. dollars, and you’ll incur foreign exchange fees when buying and selling it. 

However, as noted above, IVV is the top holding within XUS, which makes it easier for Canadians to diversify their portfolio and buy a Canadian ETF with U.S. stocks in it. The fees for IVV are lower though, so some investors still buy it over XUS.

XUS Vs VFV

VFV is Vanguard’s fund that tracks the S&P 500. The funds are very similar, with very little to distinguish themselves.

XUS typically has a higher management fee and MER, but not by much. The dividend payout is also fairly close, with XUS paying out just a bit more.

VFV does have quarterly dividend payments as opposed to semiannually for XUS.

Overall, the funds are very similar, and you can’t go wrong with either.

Read the full Vanguard VFV review here.

XUS Vs XUU

XUU tracks the entire U.S. stock market, including small, middle, and large-cap stocks. XUS tracks only large-cap stocks in the U.S.

How to buy iShares XUS ETF in Canada

My favourite and cheapest ways to buy ETFs in Canada are:

ImageProduct TitleFeaturesPrice
Editor's Choice
Wealthsimple Trade
Wealthsimple Trade
  • ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable Brand
  • Beautiful Design
Get $25 Signup Bonus
Reliable Pick
Questrade
Questrade
  • ETF buys have $0 trading fees
  • Desktop and mobile trading
  • Most types of accounts available
Get $50 Free Stock Trades

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

XUS Review by Morningstar

Because of its affordability and diversity, iShares Core S&P 500 ETF XUS is a highly regarded fund. Morningstar, a U.S.-based financial services firm, independently analyzes and rates funds across the board to help investors make solid financial decisions.

The gold standard is the highest-rated and top recommendation within Morningstar’s categories. iShares Core S&P 500 ETF XUS received this rating, with the review noting its “competitive expense ratio provides a durable performance edge over Morningstar Category peers.”

Final Thoughts: iShares XUS ETF Review

If you’re looking for added diversity and effective long-term performance, XUS ETF is a solid choice that allows Canadians low-risk exposure within the U.S. large-cap market.

XUS is affordable and makes up one of the best options for those looking to invest.

If you’re looking for other S&P 500 funds to complete your portfolio, check out these other top 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