Looking for an easy way to invest in ETFs? You must consider all-in-one ETF portfolios then.
XGRO is the growth portfolio ETF of BlackRock’s all-in-one ETF series, and one of its most popular offerings.
Let’s take a look at this iShares XGRO review to see if it’s a good fit for your investing needs.
All-in-One ETF Portfolio
An all-in-one growth portfolio ETF with very low fees offered by iShares.
- Set it and forget it without rebalancing needed
- Provides global diversification in a single package
- Lower fees than mutual funds, robo-advisor products, and other competitors in the market
- Easy to use and acquire.
- A diversified portfolio that avoids a home bias.
- Loss of control over investments when using portfolio ETFs
iShares XGRO 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.
XGRO.TO is currently trading at close to $26.22.
XGRO Key Facts
As of October 10, 2023:
- Ticker Symbol: XGRO.TO
- Exchange: Toronto Stock Exchange
- Assets Under Management: $1.674 Billion
- MER: 0.20%
- 12-Month Trailing Yield: 1.96%
- Currency Traded: CAD
- Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available
Who Should Invest?
While it might be suitable for a broad range of investors, it’s not a one-size-fits-all solution. Here’s a quick breakdown of the ideal investor profile for this ETF:
Long-term Vision: iShares XGRO is designed for those looking for long-term capital growth. If you’re in it for the long haul and not looking for quick, short-term gains, this might be a suitable option for you.
Medium to High-Risk Tolerance: With an 80/20 split between equities and fixed-income assets, there’s a higher exposure to market fluctuations. If you’re someone who can stomach short-term volatility in favour of potential long-term gains, XGRO aligns with your profile.
Hands-off Approach: If you’re a passive investor who doesn’t want to get into the nitty-gritty of daily stock market movements and rebalancing, iShares XGRO’s set-it-and-forget-it approach will appeal to you.
Diversification Seeker: Investors who understand the value of global diversification and wish to avoid a home bias will find XGRO’s asset allocation attractive.
iShares XGRO has a very low management fee of 0.18% and a Management Expense Ratio (MER) of 0.20%.
The MER might be higher than if you 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, robo-advisors, and even some other competitors’ all-in-one funds.
- The portfolio is automatically rebalanced. It means you won’t have to worry about your asset mix becoming misaligned with your investment goals.
iShares XGRO’s dividend yield as of October 10, 2023:
- 12-month trailing yield: 1.96%
- Distribution yield: 1.72%
- Dividend schedule: Quarterly
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 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 October 10, 2023:
| 1y | 3y | 5y | 10y | Incept. | |
|---|---|---|---|---|---|
| Total Return (%) | 13.13 | 5.55 | 5.77 | 6.62 | 3.85 |
Go to the Blackrock website for real-time performance numbers of XGRO.
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 favour of US markets more than the exposure toward Canadian markets.
XGRO comprises of several iShares ETFs, seen here.
As of October 10, 2023:
| Ticker | Name | Sector | Market Value | Weight (%) |
|---|---|---|---|---|
| ITOT | ISHARES CORE S&P TOTAL U.S. STOCK | Corporates | CAD 639,836,325.28 | 38.22 |
| XEF | ISHARES MSCI EAFE IMI INDEX | Corporates | CAD 329,227,517.50 | 19.67 |
| XIC | ISHARES S&P/TSX CAPPED COMPOSITE | Corporates | CAD 321,745,679.58 | 19.22 |
| XBB | ISHS CORE CAD UNIV BND IDX ETF (CA | Corporates | CAD 197,629,856.04 | 11.80 |
| XEC | ISHARES MSCI EMERGING MARKET | Corporates | CAD 66,989,993.84 | 4.00 |
| XSH | iShares Core CAD ST Cor Bd Index | Corporates | CAD 51,092,999.16 | 3.05 |
| GOVT | ISHARES US TREASURY BOND ETF | Treasury | CAD 31,047,954.01 | 1.85 |
| USIG | ISHARES BROAD USD INVESTMENT G | Corporates | CAD 31,043,152.55 | 1.85 |
| CAD | CAD CASH | Cash and/or Derivatives | CAD 4,171,494.97 | 0.25 |
| USD | USD CASH | Cash and/or Derivatives | CAD 1,757,467.02 | 0.10 |
As of October 10, 2023:
| Type | Fund |
|---|---|
| Equity | 81.10 |
| Fixed Income | 18.57 |
| Cash and/or Derivatives | 0.33 |
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 weighting on equities.
The best thing about this portfolio is that you do not need to bother rebalancing it. 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 XGRO also reduces your costs on trading fees, and you do not need to worry about constantly monitoring your asset mix.
Learn more about how all-in-one ETFs work here.
The sector weighting shows that iShares XGRO is exceptionally well diversified.
iShares XGRO Sector Weighting as of June 29, 2023:
| Sectors | Investment % |
|---|---|
| Basic Materials | 4.91% |
| Consumer Cyclical | 7.75% |
| Financial Services | 14.37% |
| Real Estate | 2.44% |
| Consumer Defensive | 5.13% |
| Healthcare | 7.89% |
| Utilities | 2.55% |
| Communication Services | 5.02% |
| Energy | 5.75% |
| Industrials | 9.75% |
| Technology | 14.59% |
XGRO Holdings – Top Ten Stocks
Keep in mind that there are thousands of stocks that XGRO holds, which is why the weighting of the top 10 is so low.
As of October 10, 2023:
| Ticker | Name | Weight (%) | Sector |
|---|---|---|---|
| AAPL | APPLE INC | 2.35 | Information Technology |
| MSFT | MICROSOFT CORP | 2.19 | Information Technology |
| RY | ROYAL BANK OF CANADA | 1.11 | Financials |
| AMZN | AMAZON COM INC | 1.05 | Consumer Discretionary |
| NVDA | NVIDIA CORP | 1.01 | Information Technology |
| TD | TORONTO DOMINION | 1.01 | Financials |
| GOOGL | ALPHABET INC CLASS A | 0.73 | Communication |
| CNQ | CANADIAN NATURAL RESOURCES LTD | 0.66 | Energy |
| TSLA | TESLA INC | 0.65 | Consumer Discretionary |
| META | META PLATFORMS INC CLASS A | 0.64 | Communication |
XGRO is a low to medium-risk ETF.
Let’s compare the BlackRock all-in-one ETF portfolios to several other ETFs.
XGRO vs. VGRO
Vanguard VGRO is very similar to iShares XGRO 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 from 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 heavier towards Canadian markets compared to iShares XGRO’s weighting towards US markets.
Overall, there is not much of a difference between the two. You can’t 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% stock. 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 lower risk tolerance.
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.
Robo-Advisor
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.
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.
The cheapest way to buy ETFs is from discount brokers. My top choices in Canada are:
- 105 commission-free ETFs to buy and sell
- Excellent customer service
- Top-notch market research tools
- Easy-to-use and stable platform
- Stock and ETF buys and sells have $0 trading fees
- Desktop and mobile trading
- Reputable fintech company
- Fractional shares available
- 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.
Conclusion
iShares XGRO 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.
I personally like how XGRO is heavily weighted toward the U.S. markets, as American stocks have outperformed Canadian historically.
I highly recommend iShares XGRO as an extremely good offering in the Canadian ETF marketplace.
Learn about all the other iShares all-in-one ETFs here.
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