All-in-one Exchange Traded Funds (ETFs) are an excellent investment for Canadians seeking various investment goals.
The iShares XGRO Core Growth ETF Portfolio is an ideal solution for you if you’re seeking an investment that can provide you with significant growth and diversification.
XGRO is a part of BlackRock’s All-in-one ETFs. The broadly diversified portfolio ETF is one of my personal favorites by BlackRock.
I will discuss the all-in-one ETF by BlackRock in my iShares XGRO Core Growth ETF Portfolio review to help you understand the reasons why I like it so much.
Review of: iShares XGRO
Use: All-in-One ETF
Wealthawesome Score: 4.9/5
- Set it and forget it
- Provides global diversification in a single package
- Lower fees than mutual funds, robo-advisor products, and some competitors in the market
- Easy to use and acquire.
- Diversified portfolio that avoids a home bias.
- Lower risk and lower reward compared to similar ETF portfolios.
- Heavily weighted towards US markets.
Summary: An all-in-one portfolio ETF with very low fees offered by iShares.
What is the iShares XGRO Core Growth ETF Portfolio?
iShares XGRO Core Growth ETF Portfolio is an ETF portfolio that has been trading on the Toronto Stock Exchange since June 21, 2007. Formerly known as the iShares Balanced Growth CorePortfolio Index ETF, BlackRock changed the ETF name, its fundamental investment objective, management fees, and fee structure on December 11, 2018, to what it is right now.
XGRO seeks to provide its investors with long-term capital growth by investing in a portfolio of ETFs managed by BlackRock Canada to provide exposure to globally diversified equity and fixed-income securities.
As of October 20, 2020, XGRO has $457 million in assets in the fund. It shows an increasing inclination for investors to find a passive investing solution to grow their funds with low fees.
How do All-In-One Portfolios Work?
All-in-one ETF portfolios are low-cost, well-diversified, and convenient to use portfolios that provide investors with a more straightforward and passive investment solution than managing a portfolio of multiple holdings themselves. All-in-one portfolios are created and actively managed by firms like BlackRock to provide professional management for the funds to meet various investing goals.
If you are a DIY investor, an all-in-one portfolio might seem too good to be true. Creating your own portfolio of several ETFs requires a deep understanding of ETFs available worldwide. You need to continually monitor the ETFs in your portfolio and keep rebalancing it to make sure you can stick to your investment goals.
The problem with DIY ETF portfolios is that there are thousands of ETFs to consider, and managing the portfolio can be overwhelming unless you are an expert at the top of the game. There are multiple all-in-one ETF portfolios investing in ETFs to meet various goals. You can find the right ETF portfolio that aligns with your investment goals and use it to your advantage.
Investing in a professionally managed all-in-one ETF portfolio like the iShares XGRO Core Growth ETF Portfolio gives you the advantage of meeting your investment goals by simply setting and forgetting your investment.
What does iShares XGRO Invest in?
In this section of my iShares XGRO review, I will list down the ETFs that XGRO invests in.
iShares XGRO consists of several underlying BlackRock iShares ETFs and Cash and/or Derivatives holdings.
The asset mix in the ETF portfolio is designed to provide you with global exposure. Still, the allocation veers in favor of US markets more than the exposure towards Canadian markets.
iShares XGRO Underlying ETFs
As of Close October 19, 2020:
|Corporates||iShares Core S&P Total US Stock (ITOT)||38.39%|
|Corporates||iShares MSCI EAFE IMI Index (XEF)||19.45%|
|ETFs||iShares S&P/TSX Capped Composite (XIC)||19.20%|
|Corporates||iShares Core CAD Universe Bond Index ETF (XBB)||12.04%|
|Corporates||iShares Core MSCI Emerging Markets Index ETF (IEMG)||4.02%|
|Corporates||iShares Core Canadian Short Term Corporate Index ETF (XSH)||3.07%|
|Treasury||iShares US Treasury Bond ETF (GOVT)||1.87%|
|Corporates||iShares Broad USD Investment Grade Corporate Bond ETF (USIG)||1.86%|
|Cash and/or Derivatives||USD/CAD||0.06%|
|Cash and/or Derivatives||USD Cash||0.03%|
For XGRO’s asset allocation, 57.84% is split between US and Canadian equities. International equities, emerging markets, bonds, and cash and/or derivatives make up the rest.
iShares XGRO Core Growth ETF Portfolio Asset Allocation
The asset allocation in iShares XGRO is almost an 80/20 split between equity and fixed-income assets.
iShares XGRO counts as a growth investment portfolio due to its heavy inclination towards equities.
The best thing about this portfolio is that you do not need to bother rebalancing it to maintain the asset allocation ratio ideal towards growth with reduced risk. If you were managing the portfolio yourself, you would have had to rebalance it manually to find the ideal ETFs to meet long-term capital growth goals.
Using the all-in-one ETF portfolio also reduces your costs on trading fees, and you do not need to worry about constantly monitoring your asset mix.
iShares XGRO Sector Weighting
In this section of my iShares XGRO Core Growth ETF Portfolio review, I will break down the ETF portfolio’s sector weightings.
iShares XGRO Sector Weighting as of Close October 20, 2021:
The sector weighting shows that iShares XGRO is not just globally diversified.
The all-in-one ETF portfolio also provides you with a broadly diversified portfolio of ETFs across several sectors of the economy.
iShares XGRO MER
iShares XGRO has a very low management fee of 0.18% and a Management Expense Ratio of 0.20%.
The MER might be higher than if you would buy and create your own portfolio of individual ETFs. However, there are several reasons the slightly higher MER is worth the investment:
- The MER for XGRO is much lower than mutual funds.
- The MER for XGRO is lower than robo-advisors.
- The MER for XGRO is even lower than some other all-in-one ETF growth portfolios.
- The portfolio is automatically rebalanced. It means you never have to worry about your asset mix becoming misaligned with your investment goals.
Blackrock iShares XGRO Dividends
iShares XGRO’s dividend yield as of October 19, 2020:
- 12-month trailing yield: 2.08%
- Distribution yield: 1.48%
- Dividend schedule: Quarterly
iShares XGRO Performance
iShares XGRO has been around since 2007 with a different name and different investing objectives. It was renamed, and its priorities changed as of December 11, 2018. However, its performance on record accounts for the ETF portfolio’s performance since before it changed course to provide long-term growth to its investors.
Here is the performance of iShares XGRO Core Growth ETF Portfolio as of September 30, 2020:
XGRO Holdings – Top Ten Stocks
iShares XGRO Top Ten Stocks as of Close October 20, 2021.
|Stock||Percentage of Assets|
|Apple Inc. (AAPL)||2.11%|
|Microsoft Corp. (MSFT)||1.81%|
|Amazon.com Inc. (AMZN)||1.52%|
|Shopify Inc. A (SHOP)||1.24%|
|Royal Bank of Canada (RY)||1.12%|
|The Toronto-Dominion Bank (TD)||0.93%|
|Canadian National Railway (CNR)||0.85%|
|Facebook Inc. A (FB)||0.72%|
|Enbridge Inc. (ENB)||0.66%|
|Bank of Nova Scotia (BNS)||0.56%|
iShares XGRO ETF vs. Other ETFs
In this section of my iShares XGRO review, I will compare the BlackRock all-in-one ETF portfolios with another ETF portfolio offered by BlackRock and an all-in-one ETF portfolio offered by Vanguard with similar investment goals to iShares XGRO.
XGRO vs. VGRO
The Vanguard VGRO Growth ETF Portfolio is offered by Vanguard Canada. It is similar to the iShares XGRO Core Growth ETF Portfolio in terms of investment goals. Both ETF portfolios seek to provide investors with long-term capital growth through a broadly diversified portfolio of underlying ETFs. Vanguard VGRO also has a similar 80/20 split between equities and fixed-income assets.
However, XGRO has a few differences with VGRO that makes it stand out. Vanguard VGRO has an MER of 0.25%, which is higher than iShares XGRO MER of 0.20%. Additionally, Vanguard VGRO has a home bias in terms of its inclination towards Canadian markets compared to iShares XGRO’s inclination towards US markets.
Overall, there is not much of a difference between the two. You cannot go wrong with either of them. However, iShares XGRO’s lower MER and management fees can make it more attractive for some investors. I also like XGRO’s lack of home bias.
Read a full VGRO review here.
XGRO vs. XEQT
Launched on August 7, 2019, iShares XEQT is another ETF portfolio offered by BlackRock. It is an all-equity ETF portfolio. The iShares XGRO portfolio offers an 80/20 split between equities and fixed-income assets. iShares XEQT, on the other hand, is 100% stocks. Both ETF portfolios seek to provide investors with long-term capital growth.
iShares XEQT has a management fee of 0.18% and MER of 0.20%, similar to iShares XGRO.
Its 100% equity asset allocation entails that iShares XEQT carries a higher risk to investor capital than iShares XGRO. However, the increased risk can also result in higher returns over time. It is a more aggressive portfolio that might not suit the investing style of every investor.
iShares XGRO Core Growth ETF Portfolio also entails relatively higher risk than other ETF portfolios offered by iShares due to its 80% asset allocation towards equities. However, its almost 20% fixed-income asset allocation provides a relatively reduced level of risk for investors. It could be more suitable for you to choose XGRO over XEQT if you have a slightly higher risk tolerance.
iShares XGRO Investing Alternatives
All-in-one portfolios might not be for everyone. Here are a couple of good alternatives, and how they compare to portfolio solutions
Do-it-yourself (DIY) Investing
You can build your own portfolio of multiple ETFs with a trading platform. You’ll be spending more time rebalancing your investments and researching what to purchase, but the fees will be lower.
Read a full overview of the best trading platforms in Canada here.
A robo-advisor has a similar investment philosophy as the XGRO portfolio would. They also invest in several ETFs to match your risk tolerance and investment goals. Robo advisor fees will be higher than the XGRO M.E.R, but you also get access to advisors whenever you need it.
Read a full review on Wealthsimple, the leading robo-advisor in Canada.
Who Should Buy iShares XGRO?
If you have a relatively higher risk tolerance and would like to see your capital grow over the years with solid returns, iShares XGRO can be an ideal ETF. Here are some of the reasons you could consider investing in the iShares XGRO Core Growth ETF Portfolio:
- You seek long-term capital growth and income.
- You plan on holding your investment for the medium- to long-term.
- You are looking to invest in a portfolio of ETFs diversified across regions and sectors.
- You are comfortable with a higher risk tolerance level associated with the 80/20 split between equities and fixed-income assets.
How to Buy iShares XGRO ETF in Canada
There are several ways you can invest in the iShares XGRO ETF in Canada, but I personally use the discount broker Questrade.
iShares XGRO Core Growth ETF Portfolio seems like an ideal option for investors who want to benefit from global diversification and enjoy passive index investing without constantly monitoring and manually rebalancing the portfolio.
I think that all-in-one ETF portfolios are excellent for passive investors who want to set and forget their money and watch it grow over the years. iShares XGRO helps you achieve that at a very low cost and without any fuss.
To round off my iShares XGRO review, I would like to give it a Wealth Awesome thumbs up.